Financial Management Service (FMS) Quarterly Intelligence Forum Presentation

1. Financial Management Service (FMS) Quarterly Intelligence Forum Presentation May 29, 2009

2. Agenda • Overview of Accounting Standardization & Budget Management Line of Business - Holden Hogue • Overview of Data Harmonization – Marcel Jemio • CGAC / FMLoB – Reimbursables – Robin Gilliam • FIRST/GTAS - Jeff Hoge

3. Strengthening Accountability and Integrity in Accounting and Reporting • Two lines of business: • Financial Management and • Budget Formulation and Execution (Budget Execution and FM Integration) • FMS Data Management and standardization • FMSData Governance

4. Standardizing Budget Business Processes • Budget Execution and Financial ManagementLine of Business (BEFMLoB) • Identified core budget execution process maps • https://max.omb.gov/community/x/EgAFAw • Utilized DOD BTA USSGL SFIS Transaction Library for government-wide use

5. OMB Treasury Agencies BEFMLoB Financial and Budgetary ReportingData Exchange Current Structure • Deficiencies: • No single source of data • Multiple data exchanges between multiple partners • Multiple schemas based on data being exchanged • Data not available electronically

6. Treasury OMB Data Exchange Concept Model Agencies BEFMLoB(cont.) Financialand Budgetary Data ExchangeConcept Model: Data Exchange Proposed Structure • Benefits: • Provides a single source for budgetary and financial data • Reduces required number of exchanges • Standard data exchange schema • Makes data available electronically

7. Enterprise Data Architecture (EDA) Activities

8. EDA Activities (cont)FMS Financial Management Data Registry Implemented in 2008 Provides an Inventory of Financial Management Data Documents Data Standards for: Name, Format, Length, Business Definition, Business Owner, etc. (ISO 11179 metadata) http://fms.treas.gov/eda

9. EDA Activities (cont) • Data model • Reflect harmonized data models in XML/UML (eg. Treasury Account Symbol class) • Self-describing web site – mind maps, mapping templates, relational browser • http://fms.treas.gov/eda/xml

10. Implementing CGAC and FMLoB at FMSCommon Government-wide Accounting Classification StructureFinancial Management Line of Business May 29, 2009

11. What is CGAC and How does it impact FMS? • CGAC is the Common Governmentwide Accounting Classification Structure with 60+ data elements: • Version 1.0 was published in July 2007 • Version 2.0 to be published by end of 2009 www.fsio.gov • FMS is concerned with the data elements that are collected for: • Fund Balance With Treasury transactions and reporting (TAS/BETC) http://fms.treas.gov/gwa/factsheet_tas.html • the USSGL accounts attributes associated with quarterly and year-end financial reporting

12. Implementing CGAC at FMS • TAS • Bureau Code • USSGL Attributes

13. Overview of CGAC TAS Components

14. What FMS needs to do to Implement CGAC TAS Data Conversion: Updating FMS data base from a 2 digit Department Regular (DR) code to 3 digit Agency Identifier (AID) code • Technical/structure change to database & Account Maintenance • Change to actual data • Change agencies from their 2 digit DR to 3 digit AID

15. Implementing CGAC TAS(cont.) First - FMS needs to inform agencies • Sent CFO letter and list of expenditure accounts informing of how codes will change – June - August 08 • Received and incorporated comments • Will send CFO Letter and complete account crosswalk from current TAS to new CGAC TAS and new Standard Bureau Code - August 09 • Comments due September 09

16. Implementing CGAC TAS(cont.) Second - FMS needs to Move Agencies to new Department Regular Codes • The following agencies will start to use their new 2 digit Department Regular Code and new Main accounts in support of moving to their 3 digit agency identifier code: • Treasury Managed Trust Funds – April 13, 2009 • Legislative: 2010 [possible new main accounts] • International Assistant Programs (IAP): 2010 [possible new main accounts]

17. Implementing CGAC TAS(cont.) Third - FMS will start to transition: • From collecting the current Treasury Account Symbols • To collecting the CGAC TAS for our transaction and reporting systems beginning in 2011 • This implementation plan, per each FMS application, is under development • Most of FMS applications will accept & display both current and CGAC TAS, except FIRST – GTAS https://www.fms.treas.gov/gtas

18. Implementing the Governmentwide Standard Bureau Code Working with OMB to align and standardize the Bureau Codes Governmentwide

19. Implementing the USSGL CGAC Attributes • Working with FSIO, OMB and the USSGL to finalize the USSGL attributes for the GTAS implementation

20. Financial Management Line of Business (FMLoB)Standardizing Financial Management across the Government • Financial Management Lines of Business (FMLoB) • FMS working very closely with OMB and FSIO on: • Payment & Funds Management • Receivables • Reporting • Reimbursables (Buy/Sell) Management • Standardize an interagency agreement • Develop communication tool for processing reimbursable activity • Help to remove audit finding concerning elimination entries

21. Managing Agency Reimbursable (Buy/Sell) AgreementsFMLoB Reimbursables Agreement Seller Buyer Invoice Key: Initiates Approves

22. Reconciling Elimination Entries Annual Department Financial Report Beyond FMLoB Reimbursables Trading Partner – Quarterly Reporting and Reconciliation Daily Reimbursable [Buy/Sell] Agreements

23. FMS Contact Information Robin Gilliam, CPA, PMP – CGAC, FMLoB Standardization robin.gilliam@fms.treas.gov, 202-874-9133 Future Website page [Finanicial Management & Budget Standardization] on www.fms.treas.gov

24. FIRST/GTAS Financial Information & Reporting Standardization Governmentwide Treasury Account Symbol (TAS) Adjusted Trial Balance (ATB) System May 29, 2009

25. Integrity from Merriam-Webster • Firm adherence to a code of especially moral or artistic values: incorruptibility • An unimpaired condition: soundness • The quality or state of being complete or undivided: completeness • Synonyms, see honesty

26. What We Want to Talk About • What is FIRST? • Why do we need it? • What are the its key concepts? • What benefits can we expect and when? • What are some of the system characteristics? • How do we get ready? • My challenge: Can I change your mind?

27. What IS FIRST? GFRS USSGL Database: SID USSGL based Reporting: GTAS

28. What We Will Collect FMS will collect quarterly USSGL-based trial balances, similar to FACTS II but expanded to cover proprietary USSGL accounts and all fund symbols. FMS will edit the inbound trial balances using the central accounting data, Bureau of Public Debt data on investments and borrowings, and rules of the USSGL. FMS will provide instant and actionable feedback to agencies and their auditors.

29. Why do we need FIRST? • Reporting by agencies to Treasury and OMB is: • inconsistent • redundant • It emphasizes reporting rather than accounting • Results are bad

30. Why do we need FIRST?Example of a Bad Result: Net Outlays • Gross disbursements • Less: Offsetting Collections • Equal: Net Outlays • Less: Receipts • Equal: Deficit • FY 2008: Net Outlays reported by agencies via monthly 224/1219/1220 differed from SBR outlays by $162 billion government-wide.

31. Why do we need FIRST?Conceptual Issues • Our model doesn’t work • Primacy of the Financial Report of the U. S. Government • Standards for the “One” entity that matters • Recognition of the Budget Process • Constancy of purpose • The clean opinion temptation • True transparency

32. Why do we need FIRST? More specific reasons • FY 2008 eliminations differences • Non-expenditure transfers: $25 billion • Buy-sell: $31 billion • The “plug”: $30 billion • Shared responsibility, in case you think it’s just an FMS problem

33. Why we need FIRST3 Types of Inconsistency • Inconsistent data in Agency Statements vs. the Financial Report of the U. S. Government. (GFRS addresses this type) • Inconsistent data in agency financial statements vs. agency monthly reporting to Treasury and Warrant and NET transactions (Not addressed) • Agency financial statement data not consistent with USSGL. (Not addressed)

34. Current Situation:FMS makes $1 trillion worth of JVs for the FR each fall. Where will the next problem pop out?

35. FIRST-Key Concepts • The Financial Report of the U. S. Government has primacy over component financial statements. • Preparation of financial statements is an accounting function, not a political one. We must use accounting principles. We will support the Financial Report of the U. S. government with trial balances. • The USSGL is the common accounting language we all speak or should speak. Therefore, the collection of USSGL-based trial balances will be the key to our future success. • We will replace FACTS I, FACTS II, IFCS and the input part of IRAS, reducing the number of agency reports and standardizing them. • We will validate and edit every incoming trial balance using every tool available (USSGL rules, central accounting system, BPD data, etc) and provide instant feedback.

36. Business as System Outputs Customers Inputs FR Agency Statements President, Congress Citizens GWA Internal Processes A-136 Accurate data suitable for Analysis. Predictive capability FASAB, TFM, etc Detailed edit reports USSGL-based trial balances Feedback Today, the stuff coming in from the left is bad. We need to help fix it. Agencies supply components that don’t fit the completed machine.

37. Current Stovepipes FACTS II STAR Stovepipes Undisbursed Trial-balance reports… FACTS I IFCS 224 – Statement of Transactions 2108 133 P&F IRAS GFRS TROR

38. Future Look GWAMP/USSGL GFRS USSGL Database: SID USSGL based Reporting: GTAS

39. Trial Balance Example • 1010 d 700 < 4119 d 1000 < • 1750 d 300 4170 c 100 < • 1759 c 15 4610 c 400 • 2110 c 300 4901 c 300 • 3101 c 1000 < 4902 c 200 • 3103 d 100 < • 3107 d 500 • 5700 c 500 • 6100 d 200 • 6710 d 15 • 8801 c 300 • 8802 d 300

40. Information Sharing—FIRST Steps • GWA Account Statement • UCAD • FACTS II Edit report • GWA’s Business Process Group

41. Expected Results • USSGL Compliance • Reduced elimination differences • More consistent reporting from each agency that FMS can read, interpret, and consolidate • Elimination of obvious and embarrassing discrepancies • Better information for decision-making • Eventually, a predictive capability

42. SystemCharacteristics • Supermaf with TAS attributes • A trial balance for every Treasury Account Symbol • Expenditure accounts like FACTS II, plus receipt accounts, deposit funds, clearing accounts (12,000 per quarter) • Beginning and ending balances plus all USSGL attributes • Bulk files only • CGAC format • Instant and usable feedback

43. System Characteristics (cont) • Ready for testing summer 2011 • Open for practice all the time after that • Agencies must successfully transmit bulk files • Ready for production first quarter FY 2012 (January 2012)

44. Improved FR Data Edits GFRS Financial Report of the U. S. Government Agency Accounting Systems Agency Financial Statements FIRST Feedback loop GWA USSGL Database USSGL based Reporting

45. Federal Agency Standard General Ledger Program and Financing Schedule FMS 2108 SF 133 FIRST FMS OMB New Process Central Accounting System Edits GFRS Treasury Annual Reporting President’s Budget

46. Government-wide Benefits • Takes advantage of GWAMP • Streamline reporting requirements on agencies • Focus on accounting, not reporting • Improved quality of financial information • Ease of use of the USSGL for agencies • Logical, long range approach that attacks core problems (i.e., intra-gov eliminations & budgetary vs. proprietary data consistency)

47. Getting Ready • Try to send consistent data to FMS. This will force you to communicate within your agency. • Use the FACTS II bulk, and generate FACTS II trial balances from your system. • Become USSGL compliant. Stop posing and commit!!! • Begin using UCAD and Account Statement • Attend FIRST forums and/or training class

48. Information • FIRST • GTAS -- http://www.fms.treas.gov/gtas • USSGL -- http://www.fms.treas.gov/ussgl • GWA –https://www.gwa.gov • Jeff Hoge -(202) 874-6179 jeffrey.hoge@fms.treas.gov