EPA gets grip on fee-for-service accounting

'Our rate development process is extremely complex. There are eight layers of cost transfers and overhead applications.'

'EPA's Timothy Hinds

Managers at the Environmental Protection Agency's National Technology Services Division in Research Triangle Park, N.C., faced a daunting task: budgeting and accounting for about $125 million in computing services they provide to other parts of the agency annually.

They took a simple approach to solving the problem and implemented commercial software to handle the job.

Timothy Hinds, program manager in the Information Technology Services Group of NTSD, said his division 'has several dozen customers whose budgets are managed by the chief financial officer.'

Payments made by other offices in the agency for computing services provided by the division flow through EPA's Working Capital Fund, a $125 million annual account to pay for CPU time, consultants and other services the division provides. Other divisions of EPA provide funds to the NTSD at the beginning of the fiscal year, and it draws on the money as it provides the services.

'Our rate development process is extremely complex,' Hinds said. 'There are eight layers of cost transfers and overhead applications. The convoluted way our rates are developed made our requirement fairly rigorous for budget development, too.'

EPA uses Pillar Release 4, Essbase and Analyzer applications from Hyperion Software Operations Inc. of Sunnyvale, Calif., to manage the internal fee-for-service system.

Hyperion Pillar, the budget application, cost the division about $100,000 for the software and related consulting, Hinds said. Implementing Essbase for online analytical processing and the Analyzer tool for interactive analysis cost another $100,000 more, including consulting, he said.

Safety and savings

The fee-for-service system is aimed at relating systems costs to the agency's mission of protecting the public's health and safeguarding the environment; also, it helps reduce costs, Hinds said.

'The Working Capital Fund is a big success as far as eliminating unnecessary use of infrastructure,' Hinds said.

Before the fee-for-service system was implemented, workers throughout EPA would often print large reports from the mainframe such as bottom-line totals of financial reports.

'That would cost seconds or minutes of CPU time,' Hinds said, adding that such operations could consume hundreds of dollars and hundreds of pages of paper. 'They were spending only appropriated dollars and weren't feeling any pain from the wasted resources.'

Since the Working Capital Fund has been implemented, EPA employees are more likely to run such reports weekly rather than daily to conserve system resources, Hinds said. He estimated that annual savings from the improved accounting range in the millions of dollars.

From a technical perspective, the division now is able to perform 'hybrid' analysis in which relational data remains in its relational database management system while the system combines it with analytical data residing in Essbase.

'In that way, we get the benefits of the large storage ability of the relational database and the fast analytical capabilities of the other system,' Hinds said.

On the button

Getting the Working Capital Fund budget figures right is important because the division is required to come within 4 percent of its projected spending for the entire year.

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