OMB to spell out financial LOB process
Accountability questions remain unanswered
- By Mary Mosquera
- May 15, 2006
If competition is the foundation of the Office of Management and Budget's Financial Management Line of Business Consolidation initiative, the administration's migration planning guidance will be the blueprint agencies need to really understand how to assemble it.
OMB later this month will release the guidance, accept public comment for about three weeks, and finalize it by the end of June, according to Mary Mitchell, the General Services Administration's deputy associate administrator for e-government and technology. GSA is the FMLOB managing agency.
'We do view that this migration planning guidance is a living document, so ... we will republish as we gain experience,' she said.
The guidance includes an updated due diligence checklist, a service level agreement template, and information on compliance and accountability. It also will contain sample draft RFP language that is not part of the current guidance to assist agencies as they put out requests for proposals to the public and private sector, Mitchell said.
OMB has already sought comments from agencies and 12 vendors on at least parts of the draft and has been meeting with selected vendors over the past month to gain a better understanding of how competition would work.
'It (the migration planning guidance) applies to what the federal agency must comply with when acquiring support from a shared-services provider. OMB will work with each agency to ensure that it complies with the framework,' an OMB spokesman said.
OMB is shaping the initiative to encourage agencies to provide more transparency and standardization in financial management.
The Environmental Protection Agency, which is in the process of procuring a financial management provider, used OMB's guidance. It provides a framework for evaluating offers, helps standardize the process for customers and service providers, and keeps agencies from having to reinvent the wheel, said Sue Arnold, EPA's acting director for systems planning and integration in the Office of the Chief Financial Officer.
'The template eliminates the need for each customer to develop its SLA from scratch and helps service providers design their offerings to meet governmentwide needs,' Arnold said.
But challenges remain in the road map'in particular, accountability in enforcing agreements'said Mari-Ellen Testa, a senior associate at Booz Allen Hamilton Inc. of McLean, Va., which provided comments on the draft SLA and overview guidance.
'I'm not quite sure they've reached a level playing field yet in terms of holding the different types of providers accountable. I believe that there are varying levels of risks for customer agencies, depending upon the type of provider that is selected,' Testa said.
A wrinkle comes when a shared-services provider is an agency governed by the Economy Act, as opposed to a private-sector company or a franchise fund agency.
Franchise fund agencies can retain earnings for capital investment and work more like the private sector. Economy Act agencies cannot retain earnings from services from year to year. The nearly 75-year-old act, which governs how agencies acquire services from one another, lets agencies charge only for services provided. They cannot spend funds they do not have or transfer it to services for another agency.
Two of the four Financial Management centers of excellence, the Defense Finance and Accounting Service and Interior Department's National Business Center, cannot retain their earnings. The Treasury Department's Bureau of the Public Debt and GSA can.
Some experts question what recourse an agency has under the Economy Act if its shared-services provider does not comply with requirements. Many vendors and agencies agree that accountability is an issue, and OMB is well aware of it, Testa said.
'The risk to an agency at this point selecting a public provider that is governed under the Economy Act is pretty high, because they don't have any meat behind enforcing the SLA or other part of their agreement,' Testa said. It will take legislative changes to level the playing field, she said.
The hope is that performance measures will keep track of important things to watch, Mitchell said. GSA is standardizing the performance measures and reporting to provide a sufficient framework for the agency being serviced and the provider.
'An active management on both sides is the framework for success. We are spelling out the responsibilities on both sides,' Mitchell said.
The SLA template incorporates the experience of others and their lessons learned, she said. It includes the period of performance, the cost, operating policies and procedures, reporting, performance measures and what happens if there is a dispute.
There are fewer performance measures than before, as OMB and GSA try to pick the few that provide the most valuable information. The comment period may provide more guidance on performance measures, Mitchell added.