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A Framework for Collaboration

Federal financial and IT experts tame runaway financial management systems.

The federal government's
annual budget of $2.3
trillion for its nearly 3,000
appropriations is the 800-pound gorilla that dwarfs
the largest corporation.

As the old joke goes, that gorilla can
sleep anywhere he wants to, but
nobody's laughing at the challenge of
integrating financial management systems
across the globe-circling U.S. federal
government. An inventory by the Office
of Management and Budget (OMB)
determined that more than 2,000
financial management systems support
the hundreds of millions of financial
transactions that keep federal programs
humming.

Getting all of those systems to
communicate and create a cohesive
financial view, even within a single
agency, is so challenging that few have
done it successfully.

The 800-pound gorilla starts to look
like King Kong when you add even
loftier goals. These include the Federal
Enterprise Architecture (FEA) initiative—the OMB-directed effort to promote
cross-agency collaboration and reduce
redundancies in business and
technology systems—and the related
vision of interoperable financial
management systems communicating
with each other and with central
financial agencies, such as the
Department of Treasury's Financial
Management Service (FMS).

"Integrating financial management
data and applications across the
enterprise stands out as the single
biggest challenge to improving financial
management in the government,"
says Bruce Turner, senior financial
analyst for the Joint Financial
Management Improvement Program
(JFMIP), a joint effort of OMB, Treasury,
the Office of Personnel Management and
other agencies working to improve
financial management
practices.

Taming financial
management systems
requires an overarching
framework, or reference
model, that standardizes
on financial systems and
processes, and bridges
the understanding gap
between diverse groups,
such as CFOs and CIOs. For years, that
framework didn't exist.

Now there's new hope. Last spring,
JFMIP, along with representatives from
the federal CIO and CFO communities
and 17 other government agencies,
hammered out the Framework for
Federal Financial Management Systems
(FFFMS).

According to Kathleen Turco, CFO
of the General Services Administration
and co-chairperson of the framework
effort, the FFFMS is the agencies' first
step toward a single integrated financial
infrastructure with standardized
applications and services supported by
integrated financial management data
and information. The framework
defines standard capabilities that an
application must support, and agencies
may use any software that meets those
standards.

Building a Consensus

In keeping with the FEA's architectural
layers—which define such elements
as hardware, software and network
designs—the framework presents
corresponding levels for defining an
agency's need for business operations,
data and information, application and
services, and technology. (See "Inside
the Framework" on page 62.)

The financial management framework
provides "a foundation document that
sets forth the vision, desired capabilities,
performance outcomes, environment and
other attributes that all federal financial
management systems must be designed
to support," says Karen Cleary Alderman,
JFMIP executive director.

Getting consensus from CIOs and
CFOs was a tricky but essential aspect
of the framework's development. "The
challenges were pretty great in that the
financial and CIO communities have
different perspectives," explains Turner
of JFMIP. "Financial experts didn't
understand how to explain financial
management in the context of the
federal IT architecture."

CIOs, he adds, typically possess
in-depth knowledge about enterprise
architecture models, but they generally
do not have the same level of
understanding about financial
management.

CFOs and CIOs should not
underestimate the framework's value
as a manager's consensus-building
tool, says John Gilligan, CIO of the Air
Force and co-chairperson of the CIO
Council Committee on Architecture
and Infrastructure. However, despite
his efforts to help coordinate input
from the federal technology
community and make the framework a
bridge between the IT and financial
worlds, Gilligan concedes that
adherence to the framework isn't
guaranteed.

"There will likely be resistance within
agencies about how to embrace a
particular financial activity," he says. "But
if we run into resistance, we can point to
the framework and say, 'This is what the
federal government is trying to achieve.' "

However, the framework does not
relieve CFOs of the responsibility to
make informed decisions about specific
financial applications for their own
organizations.

"It is not a manual on how to select or
implement a financial system," GSA's
Turco says. "Rather, it provides a guide to
use as one analyzes current systems and
looks to invest in new applications,
functionality, and cross-cutting services
with another federal agency or with the
private sector."

Framework Has an Impact

OMB sets financial policy, which
requires agencies to comply with
requirements. JFMIP is not a policy-setting organization, and it has no
enforcement power with agencies.
However, auditors rely on JFMIP
materials for compliance reviews,
which influence funding decisions—both internally and with OMB.

The framework acknowledges that
financial systems planning can no
longer take place in organizations
or departments with narrow
responsibilities. Instead, planning must
be integrated with enterprisewide goals,
Turco adds.

Already, the framework has made an
impact. The Department of Education
has begun applying some of its
guidelines on data standardization and
information architecture to streamline
data indexes and transaction flows.

"We want accurate, internally
consistent and meaningful data to be
collected and reported on financial
events," states Mark Carney, deputy
CFO at the Education Department and
chairperson of the CFO Council's
Systems/E-Government Committee.
"The framework helped us understand
that we needed to design a multitiered
and cohesive architecture to get there."

The framework is helping CFOs forge
closer ties with CIOs. At Education, the
two groups have developed a better
understanding of how mission-critical
systems operate, thanks in part to
the framework development efforts,
according to Carney.

Complying with the framework doesn't
necessarily add costs to agencies over and
above what they would normally pay for
the technologies they purchase, says the
Air Force's Gilligan.

"If you fail to consider the framework,
it could lead to unexpected risk and cost
because you failed to understand your total
business requirements and operating
environment," Education's Carney adds.

"That is the value of the framework as a
foundation system document."

Overlapping Interests

The framework acknowledges that
financial management activities occur
throughout the enterprise, including areas
outside the direct control of the CFO. It
also recognizes that from one agency to the
next, CIOs and CFOs may have different,
overlapping and enterprisewide
responsibilities.

"A lot of financial information is
involved in program management, where
organizations are buying products or
services for the Air Force," Gilligan says.
"So they need to be linked and integrated.
Somebody has to pull them together, hence
the CFO's involvement. But that person is
not just worried about individuals in the
budget and accounting departments.
Instead, CFOs have to think about how to
pull together financial information from
the program activities."

The same goes for CIOs, according to
Gilligan. "They can't just worry about the
backbone network," he points out. "Their
concerns have to include all information
technology that supports prime mission
activities, and financial systems tend to be
the underpinning of many of them."

The framework's developers, he
continues, "observed that we ought to
capitalize on the fact that many of the CIOs'
and CFOs' interests touch one another."

Integrating Activities

As he is putting the framework into
practice, Gilligan will work with the
Air Force's CFO to integrate financial
activities across the entire Air Force.
"We're trying to figure out through
the use of enterprise architecture how
to link a core accounting system, for
example, to all the different business
areas," Gilligan says.

"As transactions occur—as we buy
things—those transactions should
flow into our general accounting
system. The philosophy embodied in
the framework helps guide us in this
effort."

For some, the new guidelines come
just in time. "The document provides
a foundation of constructs and
concepts financial managers need to
incorporate and apply to their
business environment," says Carney
of the Education Department. "It's a
tacit acknowledgment that the federal
community needs to stretch its
tactical thinking beyond requirement
documentation."

AT A GLANCE
The Framework for Federal Financial Management Systems

• What it is: Interoperability guidelines were developed for federal agencies
to use in creating integrated financial management systems.

• Why it's important: It's the first financial-management systems
document created in a governmentwide effort that considers the needs of
federal CIOs and CFOs as they strive to support interagency efficiencies
and the goals of the Federal Enterprise Architecture.

• Who will benefit: Federal financial and technology managers and
agency decision-makers will have access to more complete financial
information from their own agencies and across the federal government.

• Why it's necessary: Nonintegrated stovepipe financial systems
thwart long-term objectives of achieving cohesive, enterprisewide
systems architectures.

• What the challenge is: Must gain commitment from agency
leadership to adhere to the framework when revising existing financial
management systems and specifying future needs.

INSIDE THE FRAMEWORK

Financial Management Building Blocks

The Framework for Federal Financial
Management Systems consists of four
main components:

• Business: the high-level business
objectives, processes and performance
requirements of financial management
systems

• Data and Information:

how data and information need to
be structured to provide for intra-and inter-agency
communications
among financial
management systems

• Applications
and Services:
the information
technology
infrastructure that
supports the
integrated business,
data and information
flows

• Technology:
minimum requirements
for technology and security that federal
financial management systems must
support.

These four components provide a
foundation for a collaborative financial
infrastructure, with the standardized
capabilities (e.g., common data formats)
of applications and services that let them
interoperate with other systems supported
by integrated financial management data,
says Bruce Turner, senior financial analyst
for the Joint Financial Management
Improvement Program.

The framework also conforms to the
Office of Management and Budget's
reference model for the Federal Enterprise
Architecture, OMB's effort to promote
cross-agency collaboration.

"We tried to synchronize the
framework with what OMB is doing,"
Turner says. "This goes a long way
toward sorting out what financial
management is."

BUILDING BLOCKS

The Framework for Federal Financial Management
Systems provides guidelines for assembling integrated
financial management systems.

Source: Joint Financial Management Improvement Program

Dec 31 2009

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