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OMB Update

OMB Update. Norman Dong, Deputy Controller Office of Federal Financial Management Office of Management and Budget April 23, 2013. Federal Financial Management.

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OMB Update

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  1. OMB Update Norman Dong, Deputy Controller Office of Federal Financial Management Office of Management and Budget April 23, 2013

  2. Federal Financial Management It is important to note that sound financial management does not end with a clean opinion. In fact, clean audits are merely a starting point. What we need is timely, accurate, useful financial data to manage programs effectively, to shift resources if necessary, and to make informed decisions. – Congressman Todd Platts, 2005

  3. Agency Audit Results • 21 of the 24 CFO Act agencies received a clean audit opinion─ the highest number of clean opinions the Federal Government has achieved since the passage of the CFO Act • Department of State returns to a clean opinion • Department of Homeland Security obtains a qualified opinion on all financial statements • 50% decline in auditor-identified material weaknesses from Fiscal Year 2000

  4. OMB Initiatives • Administrative Savings • Real Property • Financial Systems • Improper Payments • Debt Collection • Grants Management • Federal Financial Transparency

  5. The New Normal • The past stable or growing Budgets are gone― our “new norm” are declining Budgets • On March 1st, the President, as required, issued a sequestration order canceling $85 billion in budgetary resources across the Federal Government • Agencies are now implementing these cuts by using any available flexibility to reduce operational risks and minimize impacts on the agency's core mission in service of the American people

  6. Administrative Savings Efforts • Early focus on administrative savings • Congressional interest in administrative savings • Administrative savings target of $9B • Support deficit reduction • Fund higher priority programs • Data sharing and analytics offer additional opportunities

  7. One agency pays 13 different prices for nearly identical plans! (<400 voice minutes, unlimited text, unlimited data) Data Sharing and Analysis Price Per Month Total Monthly Plan Cost

  8. Real Property Utilization

  9. Real Property Strategy Elements • Freeze the footprint • Implement the “Freeze the Footprint” policywhich requires agencies to live within their current square footage • Leverage GSA • Utilize GSA as the government’s real estate manager to support in-depth portfolio analysis to identify and implement opportunities for agency colocations and consolidation • CPRA • Seek enactment of the Civilian Property Alignment Act (CPRA), which is a legislative proposal to streamline real property disposal and consolidation

  10. Financial Systems Overview • Observations on past practice • Poor track record of large-scale systems modernizations • Agency systems are too complex and are implemented with too many customizations • Modifications are difficult and repeated across multiple agencies increasing cost and risk • Proliferation of unique agency systems complicates government-wide financial reporting • New approach • Mandated shared services as agencies modernize • Strengthen capacity of Federal providers to serve large agencies • Empower Treasury to work with agencies and SSPs to ensure successful transitions to shared services

  11. Improper Payments Progress

  12. Improper Payments Composition Percentage Distribution of Improper Payments (FY 2012)

  13. Do Not Pay • Helps prevent improper awards and payments before they occur • Lets agencies search multiple data sources at one time to inform payment or eligibility decisions • The Treasury Department created a Do Not Pay tool including both government databases and private-sector information • By June 1, Do Not Pay will support review of all appropriate agency awards and payments as required by the Improper Payments Elimination and Reduction Improvement Act of 2012 (IPERIA)

  14. Program Integrity Funding • FY14 Budget proposal program integrity focus includes: • Improvements in access to Death Master File • Dependable source of mandatory funding for Continuing Disability Reviews (CDRs) and Supplemental Security Income (SSI) redeterminations, which would save $38 billion over 10 years. • Robust set of proposals to strengthen Medicare program integrity from last year’s Budget and prior efforts. • Program integrity investments have high ROI • For every $1 spent by the Social Security Administration (SSA) on a disability review, $9 is saved in erroneous payments • For every additional $1 spent on Health Care Fraud and Abuse Control program integrity efforts, approximately $1.50 is saved or averted

  15. Partnership Fund /Collaborative Forum • Partnership Fund established to pilot and evaluate methods to improve delivery of Federal assistance programs administered through state and local governments • Improve payment accuracy • Improve administrative efficiency • Improve service delivery • Reduce access barriers for eligible beneficiaries • The Collaborative Forum is a community of federal, state, local, and non-government stakeholders who work together to improve federally-funded, state-administered programs • The best ideas for improving service delivery and program administration come from those on the front lines

  16. Partnership Fund Pilots • Partner for solutions to improve administrative efficiencies, program integrity, service delivery and access to benefits • CMS provider risk assessment: $2.9 million to develop and test an automated tool to screen health providers enrolling in state Medicaid programs for risk of fraud • Unemployment Insurance: $600,000 to test the potential to reduce improper payments by using financial transaction monitoring services, similar to services used in the private sector, to help ensure claimants are not receiving benefits inappropriately after becoming employed

  17. Performance Partnerships • FY 2014 Budget proposal would enable leading edge states and localities to demonstrate better ways to use resources • Provides flexibility to pool discretionary Federal funds from programs that serve similar populations and communities in exchange for greater accountability for results achieved for the target populations • Proposes up to 13 state or local performance partnership pilots to improve outcomes for disconnected youth • Projects would support innovative, efficient, outcome-focused strategies using blended funding from separate youth-serving programs in the Departments of Education, Labor, HHS, HUD, Justice and other agencies • Evaluations would help us learn whether these strategies yield better outcomes and would inform future program reforms

  18. Debt Collection - Landscape In recent years, collections on Federal delinquent non-tax receivables have not kept pace with rising delinquencies.

  19. Improving Debt Collection • Leverage existing tools more effectively, including • Treasury Offset Program • Credit Bureau Reporting • Strengthen transparency and accountability • Quarterly reporting on compliance and performance metrics • Agencies develop goals and corrective action plans • Posting future results on performance.gov • Innovation • Partnership Fund Treasury Offset Program pilot to increase recoveries of hard-to-collect state debt

  20. Grants Management Priorities Alignment with Procurement Community (Spending Transparency) Alignment with Performance Community (Evidence) Alignment with GATB (Spending Transparency) Alignment with CIO Community (Systems)

  21. Grants Circular Reform • Presidential directives for reform • November 2009 EO 13520 on reducing improper payments • February 2011 Presidential memorandum • Engagement with stakeholders • February 2012 Advance Notice of Proposed Guidance (ANPG) in Federal Register (over 350 comments received) • The Council on Financial Assistance Reform developed this proposed guidance reflective of stakeholder feedback • Next steps • Public comments due June 2nd • Reforms finalized by end of 2013

  22. Federal Spending Transparency • New standard for Federal spending transparency in this Administration • Future focus • Improving data integrity • Expanding the focus to include obligations and expenditures • Providing a one-stop location for all Federal spending • Linking spending information to program activity • Key considerations • Balancing the costs and benefits of transparency • Understanding how data is and should be used

  23. Financial Reporting • OMB Circular No. A-136, Financial Reporting Requirements • OMB Bulletin No. 07-04, Audit Requirements for Federal Financial Statements • OMB Circular No. A-123, Management’s Responsibility for Internal Control

  24. Questions?

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