OMB will set rules for interagency transactions

Spurred by recent scandals involving corporate accounting practices, the government has put the creation of standards for interagency financial transactions on the fast track.

By month's end, the Office of Management and Budget plans to issue final rules setting standards for such fund exchanges, nearly two years ahead of the original plan laid out by the Joint Financial Management Improvement Program.

JFMIP's 'principals said it didn't make sense for the government not to know how to do business with each other. There is a lot of buying and selling between agencies, but there are not any rules on how to do it,' an OMB official said. 'That is what we are trying to do, establish those rules.'

The program's leaders'which include OMB director Mitchell E. Daniels Jr., comptroller general David Walker and Treasury secretary Paul O'Neill'had in recent months decided that data standards were needed sooner rather than later so the government can track and audit agencies' payments to one another. As part of the effort, OMB will also launch an interagency e-commerce portal by October 2003.

The Office of Federal Procurement Policy develops procedures for agencies to follow when contracting with vendors, but now each agency creates its own processes when buying and selling services within government. Over the past decade, the Chief Financial Officers Council, OMB and the Treasury Department have made attempts to develop a centralized approach to monitoring interagency transactions, but none of these efforts succeeded, the OMB official said. So last year, OMB asked JFMIP to study the issue and make recommendations.

OMB and Treasury, which oversees monetary transfers between agency accounts, in June circulated draft standards for payment and accounting methods. An OMB memo said using electronic means to track funds would promote 'greater accuracy, consistency and efficiency.'

Rent, payroll and procurement are some of the services that result in financial exchanges among agencies. Although agencies rarely cut checks, they regularly transfer funds from one Treasury account to another.

Money movers

The General Services Administration, for instance, collects rent from most agencies, and the Agriculture Department's National Finance Center processes payroll for 122 federal organizations.

Agencies also move funds for fiduciary transactions such as retirement accounts and for budgetary reasons such as paying for e-government projects. OMB, though, has no figures on how much money moves between agencies because there are no reporting requirements.

Once the data standards become final and the portal is up, the OMB official said, agencies could go through the entire process online. Agencies would have to follow a set of commercial best practices when placing orders; the transfer of funds through Treasury's Intragovernmental Payment and Collection System would be integrated with the ordering process.

'Our procedures will parallel the simplified acquisition procedures agencies use with commercial vendors,' the OMB official said. 'We have to get people to understand that this is acquisition and needs to treated as such. Many people have a hard time making that connection. That is our biggest challenge, changing the culture.'

Agencies will have to register with the Defense Department's Central Contractor Registration system, which is being renamed the Business Registry Network. OMB also wants to put together an online list, or yellow pages, of products and services that agencies offer.

The OMB official said the e-commerce portal would connect the entire process so agencies could go to one site to register, research, buy and sell products and services. Users would receive e-mail notifications when orders are made, filled, shipped and paid for.

The Commerce Department will host a forum about the standards on Aug. 28 at 9 a.m. in its headquarters' auditorium. For information, call 202-395-5835.

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