Leaders want reporting on same page

There are five authoritative sources that describe the codes agencies use in their financial management statements. And there are 35 elements that agencies include in those statements, but there is no standard definition for each of the components.Those are just two of the most obvious examples of how agency financial-management systems have grown together and apart, leaving agency reporting inconsistent and reconciliation for the Treasury Department, which handles all the money, a difficult task.But by developing a common governmentwide accounting code, the Office of Management and Budget hopes to align financial-management data, improve business processes and reduce the cost and risks of implementing financial systems.Or as one vendor put it, it's time to end the 'thousand flowers bloom' approach that has developed over the last 20 years.'Anytime you standardize financial practices, it always gives you efficiency, reduces errors and provides more portability,' said Sam Mok, the Labor Department's chief financial officer. 'Right now, if you take any subject, any line item on a financial statement, each agency has a different interpretation of what it is.'These standards are the key to the success of the Financial Management Line of Business Consolidation effort, said Mary Mitchell, FM LOB's program manager and the executive director of the Financial Systems Integration Office.FM LOB officials issued their exposure draft in November, received 600 comments from government and industry, and will issue the final version in April, Mitchell said.'This is the most foundational document of all we are working on,' Mitchell said. 'The things we are including in the code are the first things agencies worry about setting in stone when they migrate to a new system.'An OMB spokeswoman said four agencies'the departments of Defense, Health and Human Services and Transportation, and the Environmental Protection Agency'have been developing their own accounting codes.'Defining the governmentwide standard will eliminate the need to create a different standard at every federal agency,' the spokeswoman said.The work on the Common Government-wide Accounting Code coincides with the FM LOB's move to initially standardize four business processes: fund control, accounts payable, accounts receivable and financial reporting to OMB and the Treasury Department.Like the accounting code, these business processes also were developed differently by each agency over time, Mitchell said.'Agencies will be able to implement them uniformly so there is a lot less risk, and huge human capital benefit, because employees can transfer more easily,' Mitchell said. 'It also would mean systems implementations would be less risky because software vendors would build to a standard process.'Mitchell said the goal for both the accounting code and the business processes is to develop an 80 percent solution and leave agencies with enough flexibility so they can tweak their systems to meet unique needs.The government has attempted to standardize the accounting code before but ran into too many obstacles. Danny Harris, the Education Department's deputy CFO and team leader of the CFO Council's Financial Systems'FISO Oversight Transformation Team, said this time is different.'We have the practitioners and the financial managers in the trenches talking about what makes sense,' he said. 'We're talking about a common denominator of the minimum set of code and standards that we will all commit to. If you need others outside of that in your agency, you can do that.'In some ways, coming to terms with a common accounting code was the easy part, Mitchell said. The harder part is figuring out how to get the government to start using it.Mike Barker, Oracle Corp.'s director of federal programs in the company's applications development office, said the adoption of the code could take many years, similar to what happened when the government developed a common U.S. General Ledger code in the 1990s.'OMB's vision is for agencies to migrate to the code when they move to a new system or upgrade a current one over the next 10 years,' said Barker, who worked for the State Department financial-management office for more than 15 years before moving to the private sector. 'In some ways, this is an extension of the general-ledger work.'An OMB spokeswoman said nearly every agency has migrated to the standard general ledger code.Mitchell said the FM LOB project will recommend an implementation strategy to OMB by the summer. OMB then will work with agencies to develop a timeline to move to the common accounting standard over the next two years.'We have to decide whether we make changes to the Treasury reporting system to drive implementation or drive changes to underlying commercial software,' Mitchell said. 'If we do it in an orderly manner and decide to do all the things that impact Treasury reporting at one time, then everyone will be on the same page.'Mitchell added that feeder systems migration may be delayed and will have to be mapped to the Treasury system.'If we have a large percentage of agencies initially migrating to this core code, when we talk about reporting as a government, you don't have to ask, 'Do you have this or that piece of data,' ' Harris said. 'You don't have to come up with a sophisticated Extensible Markup Language schema. You can simply say, 'We want everyone to report this data from your general ledger from that core code.' '