Agencies urged to process data for each other

Unleashing competition among agencies for data processing
services may be the best way to eliminate duplicative and legacy financial systems as well
as cut costs, the Chief Financial Officers Council reported this month.


At the same time, Office of Management and Budget Controller G. Edward DeSeve said the
administration will step up its endorsement of agency cross-servicing arrangements.


For years OMB has discouraged agencies from bulking up their data centers to do
processing for other federal agencies. BUt now OMB is revamping its Circular A-76 on
contracting out to reduce barriers to cross-servicing.


This move, coupled with OMB's new data center consolidation requirements [GCN,
Sept. 18, Page 1], should prompt agencies to compete with one another for payroll and
other routine personnel processing services, DeSeve said.


"Allowing competition is the way of the future, and payroll services is a classic
example," DeSeve said. "If FTE is being cut, why spend it processing payroll?
Agencies can meet their streamlining targets and meet their cost reductions."


The CFO Council urged agencies to reformat mandatory financial system reports to show
how upgrades and commercial software boost productivity and strengthen agencies' abilities
to carry out their core missions.


At an OMB press briefing in Washington, members of the CFO Council advocated these
measures as they released their annual Federal Financial Management Status Report and
five-year plan.


DeSeve said the council has made improving financial systems its top priority because
reliable financial data is crucial for supporting federal programs and making tough budget
decisions.


The council of the government's top financial management officials said agencies should
rely on the standard systems architecture developed by the Joint Financial Management
Improvement Project and continue to use off-the-shelf software in modernization
initiatives.


"This report reflects the administration's commitment to better financial
management," OMB Director Alice M. Rivlin said. "We are dedicated to improving
the systems that process the government's funds, effectively implementing the Government
Performance and Results Act, and developing agencywide and governmentwide plans, financial
statements and accounting standards."


The effort to reduce the number of duplicative and standalone financial systems and
establish standard system interfaces has spanned several decades and administrations.


Agencies' financial applications dropped from 1,306 in 1992 to 1,183 in 1994. Half of
the remaining applications are scheduled for replacement or upgrade within the next five
years.


Nevertheless, DeSeve said budget cuts will force agencies to be smarter in finding the
right mix of system upgrades and consolidations to meet the government's new requirements
for performance measures and audited financial statements.


"We've come a long way, but still have a long way to go. We need to get away from
paperwork," DeSeve said. "We have to be more efficient and effective. Agencies
have to buy off the shelf more, and we should see the number of systems go down so we're
not quite so dependent."


DeSeve said the council has called for combining the mandatory annual reports on system
status and material weaknesses into a single document showing how financial systems
support core mission programs.


The changes are designed to help agencies comply with the Government Performance and
Results Act, which requires agencies to document how well they use their budgets and staff
to provide mission services.


A handful of agencies including the General Services Administration, Social Security
Administration and the departments of Transportation and Veterans Affairs will produce the
first such reports next year.


"It's an accountability scorecard that everyone can use," said Frank
Sullivan, deputy CFO for Veterans Affairs. "This has program manager interest because
this is their information. We address material weaknesses and problems with systems and
focus on program performance."


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