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GCN Home > 02/19/07 issue

Leaders want reporting on same page

Common accounting code could weed out some of the ‘thousand flowers’

By Jason Miller, GCN Staff

There are five authoritative sources that describe the codes agencies use in their financial management statements. And there are 35 elements that agencies include in those statements, but there is no standard definition for each of the components.

Those are just two of the most obvious examples of how agency financial-management systems have grown together and apart, leaving agency reporting inconsistent and reconciliation for the Treasury Department, which handles all the money, a difficult task.

But by developing a common governmentwide accounting code, the Office of Management and Budget hopes to align financial-management data, improve business processes and reduce the cost and risks of implementing financial systems. Or as one vendor put it, it’s time to end the “thousand flowers bloom” approach that has developed over the last 20 years.

“Anytime you standardize financial practices, it always gives you efficiency, reduces errors and provides more portability,” said Sam Mok, the Labor Department’s chief financial officer. “Right now, if you take any subject, any line item on a financial statement, each agency has a different interpretation of what it is.”

These standards are the key to the success of the Financial Management Line of Business Consolidation effort, said Mary Mitchell, FM LOB’s program manager and the executive director of the Financial Systems Integration Office.

FM LOB officials issued their exposure draft in November, received 600 comments from government and industry, and will issue the final version in April, Mitchell said.

“This is the most foundational document of all we are working on,” Mitchell said. “The things we are including in the code are the first things agencies worry about setting in stone when they migrate to a new system.”

An OMB spokeswoman said four agencies—the departments of Defense, Health and Human Services and Transportation, and the Environmental Protection Agency—have been developing their own accounting codes.

“Defining the governmentwide standard will eliminate the need to create a different standard at every federal agency,” the spokeswoman said.

The work on the Common Government-wide Accounting Code coincides with the FM LOB’s move to initially standardize four business processes: fund control, accounts payable, accounts receivable and financial reporting to OMB and the Treasury Department.

Like the accounting code, these business processes also were developed differently by each agency over time, Mitchell said.

“Agencies will be able to implement them uniformly so there is a lot less risk, and huge human capital benefit, because employees can transfer more easily,” Mitchell said. “It also would mean systems implementations would be less risky because software vendors would build to a standard process.”

Mitchell said the goal for both the accounting code and the business processes is to develop an 80 percent solution and leave agencies with enough flexibility so they can tweak their systems to meet unique needs.

More news on related topics: Business Process Management, Content / Record Management, Knowledge Management, Lines of Business, IT Management



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