Accounts Conceivable

Financial software serves many masters.It must first provide specific functionality for an agency, just as for any business use.It also must be able to integrate with other applications, such as those for planning or human resources, and with higher-level systems for easy consolidation of reporting entities.Furthermore, a financial software package needs to track myriad items intended to satisfy a long list of legislated procurement and accounting mandates.And many of its processes must be automated and customizable'and simple enough to give mere mortals a fighting chance of getting their work done.Funding for federal projects and programs may come from a variety of sources, including congressional appropriations, reimbursements for goods and services, revenue from within the agency, and return of spent funds as refunds or recoveries.Each of these sources must be handled separately. A good financial package can handle the details.The government has established rigorous standards for financial packages, to ensure compliance with federal requirements.The Federal Accounting Standards Advisory Board (FASAB, ), the Standard General Ledger and the Joint Financial Management Improvement Program (JFMIP) all provide standards for federal financial packages.JFMIP () tests financial packages and certifies that they meet the unique needs of the government. For example, its FACTS II test verifies that a financial package satisfies the requisites of the Treasury Department's Federal Agencies Centralized Trial Balance System II. The test allows agencies to present a single set of accounting data that satisfies several Treasury Department and Office of Management and Budget financial reporting requirements.A financial software package for federal agencies must have JFMIP approval.Compliance with the Government Performance and Results Act is an important part of many agency activities. You might need to define metrics, establish goals and projections, manage output from various sources and compare expected performance with actual performance. The right financial package can monitor ongoing performance and create reports as necessary.But JFMIP certification is essential. You can't just spring for highly regarded business-oriented financial packages. You must be sure that your financial package meets the unique demands of your agency. Even for agencies not mandated to satisfy JFMIP, the JFMIP seal of approval ensures a certain level of federal capability.There are basic functions that any package must be able to provide, including planning, budgeting, general ledger, cost accounting, procurement, purchasing, payment, performance management and monitoring of spending activity.Although government-oriented applications often lag behind those of industry, in this case that's a good thing: Vendors need to be able to incorporate the best-practices features of business financial packages into their offerings for agencies.Just be wary of packages clearly designed with business in mind that might be trying to pass themselves off as agency-ready. The business model'with assumed central, top-down spending authority, for example'is different from most agency models, which have complex interconnections. Government accountability is quite different from business accountability.No single package is a fit for every agency right off the shelf. Packages should be flexible enough for customization to specific agency needs. This customization should not require heavy-duty programming skills, either, but allow for simple choices among multiple options.Keep in mind any integration requirements with other agencies or other applications within an agency. Some packages prefer certain underlying databases, for example, while others work well with all the major players. Some Web packages offer easy access and standard protocols that can simplify interactions with different systems.If, as is often the case, your agency's funding comes from several sources, make sure the package can handle multiple funding sources. Similarly, the authority to approve spending may rest with several people; the package should be able to keep that information for you.Some integrated packages include a workflow function that automatically routes requests for approval to the right people, which might save you some steps.Reporting capabilities also are important. A financials package should be able to automatically create all of the standard reports you need, including OMB and Treasury forms. Some packages even keep track of when different reports need to be prepared for different oversight entities.Query tools should allow you to pose ad hoc requests for information. Some products even provide online analytical processing features, such as drill-down, which can be useful in elucidating reports or analyzing funding or spending.You might also want to check for features that let you track project status, based on financial resources and plans. For example, it might be useful to know when spending reaches specified percentages of the total project budget.It's difficult to pin price tags to these packages because they all fluctuate with the size and the extent of an implementation and agencies, bureaus and other government offices differ so much in size, tasks and requirements. The price can range from about $100,000 to well into the millions.To get an idea of how pricing works for this kind of software, check out an analysis by the Agency for International Development of several government implementations at . The report takes a look at both mainframe and client-server applications being used at a number of agencies, including the Agriculture, Commerce, Energy and Labor departments.Many packages have a modular architecture, which allows agencies to phase them in one module at a time. This can ease the cost of entry to a new system, as well as simplify learning and transitioning from other packages to the new package.Many agencies use legacy financial applications, often developed in-house. Lots of these applications have compliance issues, which suggests that many agencies will be on the lookout for commercial replacements.In the past year, 13 of the 24 major agencies'including the departments of Agriculture, Energy, Health and Human Services, Interior, Justice and the Treasury'announced their intent to replace core financial systems within five years.Web access also is becoming important to many agencies. Vendors are responding: several packages already have Web access, and others have plans to add it.The buck doesn't stop anywhere; it's a moving target. The right financial package can at least keep it in your sights.