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About the Financial Management ServiceStrategic Plan For Fiscal Years 2003-2008Posted September 30, 2003
TABLE OF CONTENTS |
The Financial Management Service (FMS) is a bureau of the United States Department of the Treasury. FMS performs many of the fundamental cash management functions that were delegated to Treasury when Congress created the Department in 1789. FMS’ main business lines are payments, collections, debt collection, and governmentwide accounting.
FMS’ workforce is comprised of approximately 2,100 people in the Washington, D.C. metropolitan area and at four Regional Financial Centers located in Austin, Texas; Kansas City, Missouri; Philadelphia, Pennsylvania; and San Francisco, California and one Debt Collection Center located in Birmingham, Alabama.
The Financial Management Service mission is to provide central payment services to federal program agencies, operate the federal government's collections and deposit systems, provide governmentwide accounting and reporting services, and manage the collection of delinquent debt.
Goal 1. Provide federal payments timely and accurately, move toward an all-electronic Treasury for payments, and determine the optimal payment processing environment for the future.
Goal 2. Provide timely collection of federal government receipts, at the lowest cost, through an all-electronic Treasury.
Goal 3. Maximize collection of government delinquent debt by providing efficient and effective centralized debt collection services.
Goal 4. Produce accurate, accessible, and timely governmentwide financial information and reports which contribute to improved quality of the nation's financial decision making.
Goal 5. Facilitate the achievement of a clean audit opinion on the Financial Report of the U.S. Government through FMS’ internal operations and support to government agencies.
Goal 6. Establish policies and processes to facilitate the integration of e-commerce technologies into FMS' business programs and infrastructure.
FMS had identified a series of cross-cutting objectives and strategies that support our business activities and form the core components for each FMS goal. These objectives and strategies are listed below. The objectives and strategies that are more closely associated with a specific goal are reiterated in this plan as appropriate. The remaining cross-cutting objectives and strategies are listed only in this section of the plan and support all FMS goals.
1. To increase the percentage of federal payments made electronically.
2. To increase the percentage of federal receipts collected electronically.
3. To increase the amount of delinquent debt collected.
4. To strengthen federal financial management by improving the quality, timeliness, accuracy, delivery and integrity of government financial information and reporting.
5. To facilitate the development of a knowledgeable federal financial community.
6. To promote and expand the use of electronic commerce technologies within the federal financial community.
7. To deliver quality products and services that are responsive to customers’ needs.
8. To increase program efficiencies and reduce reporting and operational burdens by converting paper-based processes to electronic processes and by using new technologies.
9. To provide information products and services to customers and stakeholders in a safe and secure environment.
1. Provide incentives and reduce barriers for customers to increase use of electronic payments and collections.
2. Use sound management practices to oversee IT investments and ensure they operate in a secure environment.
3. Maximize Internet business activity.
4. Provide agencies with easy and secure access to FMS systems and information.
5. Increase agencies' knowledge of financial management and accounting.
6. Minimize redundant operations and systems.
7. Work collaboratively with Federal, state and local agencies to identify issues and opportunities to improve financial management.
8. Support and fund pilots and prototypes to quickly assess emerging technologies and approaches and to evaluate the business case.
9. Provide incentives and reduce barriers for stakeholders to take action in support of improved accounting, cash management and debt collection.
10. Take a leadership role to identify and resolve issues even though responsibility may be shared with other agencies.
11. Serve as a model for other federal agencies by providing good financial management and maintaining effective internal controls.
12. Foster a learning organization with a supportive work environment where all employees can maintain the knowledge, skills, and tools to succeed and are valued and respected for their shared contributions.
13. Recruit and develop quality employees from diverse backgrounds to ensure the continued success of FMS' current and future programs and activities.
14. Provide timely and accurate cost accounting data and performance information to aid in decision making.
The Financial Management Service (FMS) disburses 85 percent of the federal government's payments to a wide variety of recipients, such as those who receive Social Security, Internal Revenue Service (IRS) tax refunds, and veterans’ benefits. In FY 2002, FMS issued nearly 922 million non-Defense payments, with a dollar value in excess of $1.6 trillion. Approximately 73 percent of these transactions were issued by electronic funds transfer (EFT), an increase of 1 percent over FY 2001. The remainder of FMS’ payments are disbursed by check.
Key Partners in Achieving this Goal Include: Federal Program Agencies (FPAs), recipients of Federal payments, consumer and community-based organizations, government vendors, the Federal Reserve System, financial institutions, Congress, Office of Management and Budget, General Accounting Office and the National Treasury Employees Union.
Description of the Starting Point in the Current Year
FMS continues to expand the use of electronic media to deliver federal payments, improve service to payment recipients, and reduce government program costs. These efforts help decrease the number of paper checks issued and minimize costs associated with postage; lost, stolen, and misplaced checks; and, inefficiencies associated with the non-electronic delivery of benefits. Currently three out of four benefit payments and virtually all Federal salary payments are made electronically. Vendor and miscellaneous payments made by EFT are continuing to increase and in FY 2002 were made at a rate of 55 percent and 54 percent, respectively.
FMS has undertaken efforts to modernize its payment systems, incorporating new technologies and the Internet. The Secure Payment System (SPS) replaces the Electronic Certification System, which has reached technological obsolescence. SPS is the cornerstone of the payments process in which agencies certify the accuracy, validity and legality of their payments. SPS provides a significant technological upgrade that is more efficient, more user friendly and web accessible while providing greater integrity and security to the payments process. FMS will roll-out SPS to the program agencies in FY 2004.
FMS continues to expand the Stored Value Card (SVC) program, especially with the Department of Defense (DoD). SVCs are issued to employees, military service members, contractors and others at military locations and ships at sea. The SVC program eliminates coin and currency in circulation at military bases, thus reducing float and eliminating the cost of securing, transporting and accounting for cash held outside the Treasury. Stored value cards are used at all military basic training sites in the United States and at Army bases worldwide. FMS and DoD plan to expand the SVC program from eight Navy ships to all the ships at sea over the next few years. Since the program's inception in 1997 through June of 2003, over 1.4 million SVCs have been issued with approximately $300 million loaded onto the cards. FMS is the largest issuer of SVCs in North America.
Our Approach to Achieving the Goal
FMS will continue to concentrate efforts on converting remaining check payments to EFT. FMS is working with the Federal Reserve and Social Security Administration on initiatives involving EFT research, marketing and education campaigns. This research will provide data about the reasons people choose to receive checks and what would encourage them to move to electronic payments. "Check into EFT" is an initiative to develop a nationwide marketing and education campaign to promote the use of electronic payments.
As a result of this research, FMS will explore new incentives and options for making electronic payments, such as the issuance of pre-paid cards that do not require the payment beneficiary to establish a bank account. These pre-paid cards would enable federal payment beneficiaries to access their benefits through ATMs or Point-of-Sale machines.
To increase the number of vendor and miscellaneous payments made electronically, FMS is testing a new prototype payment system—the Internet Payment Platform (IPP). The IPP is a new web-based payment application that involves a data warehouse containing rich, detailed information associated with the payment. The IPP captures and consolidates data from various systems into one, central location and makes the information available to any party to the transaction at any point in the payment processing cycle. The IPP offers great potential for converting large volumes of vendor and miscellaneous checks to electronic payments since remittance information could be associated with each payment that cannot be done currently using the EFT/Automated Clearing House (ACH) systems.
FMS’ Federal Finance and Regional Operations program offices work together to maintain FMS’ leadership role in the ACH and continue efforts to upgrade and expand applications for the Automated Standard Application for Payments (ASAP), which is one of two grants payment systems approved for use by Federal civilian program agencies. A new, web-based ASAP.gov will be rolled out to agencies and grantees over the next two years.
FMS will also identify opportunities to improve service to customers by reducing FMS processing time for larger program agencies such as the Social Security Administration and the IRS; and re-engineering the process to expedite credits for canceled and returned payments.
FMS is in the process of developing and designing a new system to replace the outdated Check Payment and Reconciliation System (CP&R;) with the Treasury Check Information System (TCIS). TCIS will be designed by the Federal Reserve Bank acting as our fiscal agent and will be a web-based application that uses COTS software for process flow, accounting, reconciliation and reporting functions for all Treasury checks that are issued and paid. TCIS will change the way our claims activities are handled, resulting in a more streamlined and efficient process. TCIS is being developed to be FMS’ future centralized payments data warehouse that will store information on the status and disposition of all disbursed payments, both check and EFT.
FMS will stay abreast of the latest development in check truncation. FMS has been a leader in fostering check conversion and truncation of payments made to the federal government. The financial services industry is now strongly supporting the move to check truncation, which will significantly streamline the clearance and settlement of checks, resulting in the elimination of paper and provide potential cost savings. Check Truncation would allow banks to convert paper checks to electronic checks with equivalent legal status. This has the potential to significantly change the way Treasury checks are cleared and settled through the banking system and how check claims and counterfeit and forgery cases would be processed. Our TCIS system is being developed with the flexibility and robustness to handle check truncation. FMS stands ready to implement regulatory changes over Treasury check processing that may be needed once check truncation is fully adopted by the financial services industry.
Objective: To increase the percentage of federal payments made electronically.
Strategies: To accomplish this objective, FMS will:
Objective: To promote and expand the use of electronic commerce technologies within the Federal financial community.
Strategies: To accomplish this objective, FMS will:
Objective: To increase program efficiencies and reduce reporting and operational burdens by converting paper-based processes to electronic processes and by using new technologies.
Strategies:To accomplish this objective, FMS will:
Key External Factor Affecting Achievement of Goal
Two major challenges remain in increasing growth in electronic payments. The first challenge is moving Federal check recipients that do not have bank accounts into the financial mainstream— through the use of ETAs’ or Direct Deposit. In an effort to increase the use of EFT for federal benefit payments, FMS will work with Federal benefit paying agencies to test new approaches and incentives for increasing EFT participation. The second major challenge is increasing the use of EFT to make tax refund payments. This requires significant support and coordination with IRS to achieve a significant increase in this area. Strong public outreach and education programs in both areas will be critical to success in increasing electronic payments.
The Financial Management Service (FMS) is responsible for administering the world’s largest collections system, collecting over $2.2 trillion annually through a network of more than 10,000 financial institutions via both electronic and paper-based mechanisms. The federal government’s collection activities center around three major groups: (1) individuals, (2) businesses/ institutions, and (3) other Federal entities. FMS develops and implements collections policies and procedures for the federal government, facilitates efficient collections by designing and administering state-of-the art collection systems, and promotes electronic collections to federal program agencies.
FMS' collection of Federal revenues include individual and corporate income tax deposits, customs duties, loan repayments, fines, and proceeds from leases. Each year, more than $1.5 trillion of taxes are collected, primarily through the Electronic Federal Tax Payment System (EFTPS). EFTPS is a tax payment system that offers businesses and individuals the convenience of making their Federal tax payments electronically 24 hours a day, 7 days a week, instead of using paper coupons. EFTPS is one of many electronic alternatives being offered by Treasury to provide business and individual taxpayers with an efficient approach to managing tax dollars and information.
Key Partners in Achieving this Goal Include: Federal Program Agencies, the Federal Reserve System, Financial Institutions, Congress, Office of Management and Budget, General Accounting Office, and the National Treasury Employees Union.
Description of the Starting Point in the Current Year
In FY 2002, FMS collected over $2.2 trillion through its various collection mechanisms (both electronic and paper). The majority (79 percent) was collected electronically through the EFTPS, Pay.gov, Online Paper Check Conversion and other electronic mechanisms. The remaining amount (21 percent) was collected through paper-based mechanisms (Lockboxes, Treasury General Accounts, and Federal Tax Deposits). As of June 30, 2003, more than 4.2 million taxpayers are enrolled in EFTPS; however, an estimated 4.6 million taxpayers still using paper tax coupons and checks, as well as approximately 10.5 million individuals who make more than one payment a year by coupons and checks.
During FY 2002, FMS established a new organization dedicated to providing oversight of the security of lockboxes and other collection systems operated by Treasury's Financial Agents.
Our Approach to Achieving the Goal
FMS continues to move towards an all-electronic Treasury for the collection of federal government receipts. EFTPS is a priority focus in our efforts to increase electronic collections. FMS, working together with IRS, will actively promote the use of EFTPS On-Line which is the newest, web-base electronic payment option. Since the implementation of EFTPS On-line in September 2001 through June 2003, approximately 180,000 enrollments and $106 billion in collections have been processed over this Internet application. FMS and IRS will also be working on other initiatives to increase the use of EFTPS such as (1) changing processes so that EFTPS is the preferred method for businesses to make their tax payments, (2) allowing individuals to make tax payments on-line without having to enroll in EFTPS, (3) streamlining the payment and enrollment process for business taxpayers (4) eliminating regulatory barriers that will encourage more businesses to use EFTPS, and (5) expanding marketing and outreach to tax professionals and the small business community. In addition, FMS will continue to conduct research that will guide it in designing enhancements to EFTPS that meet taxpayer needs and effectively market EFTPS to both individual and business taxpayers.
FMS will continue to roll out Pay.gov to federal agencies and their customers. Pay.gov is a secure governmentwide collections portal that has the potential to convert 80 million transactions totaling $125 billion a year from paper processes to electronic payments and on-line forms processing. Pay.gov offers a suite of four services to agencies - - collections, forms presentment/submittal, user authentication, and centralized financial reporting. The authentication service provides a knowledge– based authentication of individuals conducting financial and non-financial transactions with the federal agencies. This knowledge–based authentication process (verification engine) will connect with the federal government's E-Authentication Gateway and will facilitate the delivery of electronic services to taxpayers in a secure and easy to use manner.
FMS will also continue to explore methods for reducing the costs of its banking services by promoting the use of less expensive electronic mechanisms and implementing new techniques to expedite the collections process. FMS is working to improve the efficiency of the lockbox system used to support processing of collections with such services as Paper Check Conversion at lockbox sites and document imaging services. FMS will continue to provide incentives for federal program agencies to use more efficient and cost-effective collection techniques.
Objective: To increase the percentage of Federal receipts collected electronically.
Strategies: To achieve this objective, FMS will:
Objective: To promote and expand the use of electronic commerce technologies within the Federal financial community.
Strategies: To achieve this objective, FMS will:
Objective: To increase program efficiencies and reduce reporting and operational burdens by converting paper-based processes to electronic processes and by using new technologies.
Strategies: To achieve this objective, FMS will:
Provide incentives and reduce barriers for customers to increase use of electronic payments and collections.
Key External Factor Affecting Achievement of Goal
The Debt Collection Improvement Act of 1996 (DCIA) and other statutes provide the tools for administering a centralized program for the collection of delinquent tax and non-tax debts. The Financial Management Service (FMS) is charged with implementing the government’s delinquent debt program and does so through two main components: the Treasury Offset Program (TOP) and the Cross- Servicing Program.
TOP is a centralized offset program developed by FMS. TOP is designed to assist federal program agencies (FPAs) and states in the collection of delinquent debts such as federal non-tax debts, certain Federal tax debts, state tax debts, and child-support obligations. FMS maintains a database of delinquent debtor records referred from FPAs and states. TOP enables the matching of these delinquent debtor files against payment files. When a match occurs, the payment is intercepted and offset up to the amount of the debt.
Cross-Servicing is the centralized debt collection process that manages delinquent debts referred from Federal program agencies through the use of a variety of debt collection mechanisms, such as issuing demand letters; executing repayment agreements; referring accounts to TOP for administrative offset; referring debts for collection to Private Collection Agencies and the Department of Justice; reporting debts to credit bureaus; initiating administrative wage garnishment (AWG); and reporting to the IRS, as income, debts that have been closed out.
In January 2003, FMS implemented a new system, called "Debt Check", that will enable credit
agencies to identify delinquent debtors who apply for federal loans and loan guarantees.
Key Partners in Achieving this Goal Include: Federal Program Agencies, states, Federal Reserve
System, Department of the Treasury, Congress, Federal Credit Policy Working Group, Chief Financial
Officers’ Council, Private Collection Agencies, Office of Management and Budget, General Accounting
Office and the National Treasury Employees Union.
FMS will focus on establishing and maintaining alliances with customer agencies and stakeholders that promote effective debt collection policies and procedures. FMS will also focus on establishing and maintaining ongoing dialogues with the above partners and stakeholders concerning significant policy issues and status of the program.
Description of the Starting Point in the Current Year
Since the passage of the DCIA in 1996, FMS has been extremely successful in developing and executing plans to lay a strong foundation for the debt management program. FMS' debt management program has provided exceptional leadership across government and significantly increased the collection of delinquent debt. Through July 2003, FMS had collected a total of $18.1 billion of delinquent debt. Of this amount, $17.8 billion was collected through TOP and over $331 million through Cross-Servicing.
The improvements and achievements in the debt collection program are the result of outstanding cooperation and collaboration across multiple levels of governments—federal, state and local. The program is also a model of effective public sector – private sector partnership since private collection agencies and credit reporting bureaus play a key role.
Major accomplishments of the debt collection program include adding continuous tax levy to the Treasury Offset Program, which continues to significantly increase collections each month; implementing the program to collect delinquent state tax debt; fully implementing the Social Security benefit payment offset portion of TOP, which has significantly increased offset collections; implementing salary offset; creating the Debt Check system which allows agencies to determine if an applicant for Federal assistance owes a delinquent debt to an FPA; and issuing the regulation to enable federal program agencies to garnish private sector wages (i.e., administrative wage garnishment). FMS has issued numerous regulations on debt collection and will continue to propose legislation to simplify, clarify and improve the government’s and FMS' effort in debt collection. FMS plans to build on this foundation to continue to increase the collection of debts owed to the government.
Our Approach to Achieving the Goal
The primary objectives of debt collection services in the next few years are to: (1) effectively utilize all available Cross-Servicing tools, especially administrative wage garnishment, to maximize the collection of delinquent debt owed to the government; (2) continue to expand the offset program, incorporating additional payments and debts (i.e., centralized salary offset, non-treasury disbursed payments) to support delinquent debt collection; (3) assisting agencies in barring delinquent debtors from obtaining federal loans and loan guarantees; and, (4) increase the early referral of eligible, legally enforceable debts for the offset and cross-servicing systems.
FMS will provide support and assistance to help federal agencies implement Administrative Wage Garnishment (AWG). This collection tool has enormous potential since it allows private collection agencies to garnish private sector wages of delinquent debtors to collect agency debts. The use of AWG through Treasury’s cross-servicing programs will enable agencies to take advantage of FMS’ centralized processes and established safeguards.
FMS is working closely with the payroll providers that were selected as part of the E-Payroll initiative so that they all participate in our centralized federal salary offset program. In addition, FMS will work with creditor agencies to ensure that their eligible debts are subject to salary offset.
FMS will continue to rollout the offset of non-Treasury disbursed payments, which is a new element of our debt collection program that was started in early 2003. Under this new initiative, federal non-tax and tax debts owed by vendors will be collected by offsetting or levying payments disbursed by agencies other than Treasury (e.g. Department of Defense, U.S. Postal System, the Courts system).
Barring delinquent debtors from obtaining new federal loans and loan guarantees is a key priority for the debt collection program. In January 2003, FMS unveiled a new system, Debt Check, that allows lending agencies to access information from the FMS delinquent debtor database for use in their credit screening process so that new government loans are not made to delinquent debtors. FMS will rollout Debt Check to credit agencies over the next few years.
Debt collection is a critical factor in improving financial performance which is part of the President’s Management Agenda initiatives. The debt collection program has an impact on agency fiscal operations, the economical stewardship of taxpayers’ dollars and the integrity of important federal programs, such as student loans and benefit payment programs. FMS will be working with agencies, OMB, GAO and agency Inspectors General to place an increased emphasis on ensuring that accounts receivable balances that agencies report to Treasury on a quarterly basis tie directly to their financial statements.
Objective: To increase the amount of delinquent debt collected.
Strategies: To achieve this objective, FMS will:
Objective: To provide information products and services to customers and stakeholders in a safe and secure environment.
Strategies: To achieve this objective, FMS will:
Key External Factor Affecting Achievement of Goal
The Financial Management Service (FMS) provides financial accounting and reporting services for the government-at-large. FMS oversees the federal government’s central accounting and reporting system, keeping track of its monetary assets and liabilities and its receipts and outlays. FMS also works with federal agencies to adopt uniform accounting and reporting standards and systems. FMS gathers and publishes governmentwide financial information that is used in establishing fiscal and debt management policies and also used by the public and private sectors to monitor the government’s financial status. These publications include: the Daily Treasury Statement, the Monthly Treasury Statement, the Treasury Bulletin, the Combined Statement of Receipts, Outlays, and Balances of the United States Government, and the Financial Report of the United States Government. In this capacity, FMS oversees and accounts for a daily cash flow in excess of $50 billion.
FMS is building and implementing a system to improve the exchange of financial information among FMS, Federal Program Agencies (FPAs), Office of Management and Budget (OMB) and the banking community. Once completed, this Governmentwide Accounting (GWA) Modernization Project will comprehensively replace current governmentwide accounting functions and processes that are both internal and external to FMS. It will improve the reliability, usefulness and timeliness of the government’s financial information, provide FPAs and other users with better access to that information, and will eliminate duplicate reporting and reconciliation burdens by agencies. In addition, FPAs will have better tools for reporting financial information and access to daily account statements for the status of their financial information at the Treasury.
Key Partners in Achieving this Goal Include: FPAs and financial institutions that are responsible for submitting accurate financial data. An interagency Governmentwide Accounting Advisory Group with representatives from major program agencies, OMB, the General Accounting Office (GAO) and the Federal Reserve provide continuous input and guidance to FMS in restructuring the basic framework of the central accounting and reporting processes. The Standard General Ledger Board, consisting of representatives from the Chief Financial Officer (CFO) agencies, provides oversight and approval of all U.S. Standard General Ledger activities. FMS chairs the Board and provides most of the necessary resources to accomplish the Board’s charter. Key partners also include Congress, the Open Market Desk of FRB New York and the National Treasury Employees Union.
Description of the Starting Point in the Current Year
During Fiscal Year (FY) 2002, the government’s cash position, budget surplus, and deficit information were reported on schedule and accurately 100 percent of the time. FMS issued the fiscal year 2002 Financial Report of the U.S. Government on March 31, 2003, which is the required statutory due date. OMB is requiring agencies to issue their FY 2004 financial statements by November 15, 2004, 45 days after the fiscal year-end, and FMS subsequently will accelerate the issuance of the FY 2004 Financial Report to December 15, 2004. In preparation for the accelerated timeframe for FY 2004, FMS will accelerate the issuance of the FY 2003 Financial Report by at least one month. FMS is developing a new process for preparing the Financial Report to meet the new accelerated timeframe and enhance the integrity of the Report. This accelerated timing will allow adequate time to have the financial statements considered in the budget process. In addition, this process will link agency financial statements to the Financial Report and should eliminate material weaknesses associated with its preparation.
Our Approach to Achieving the Goal
FMS will continue to place increased emphasis on improving the quality, timeliness and integrity of the federal government’s financial data. This goal will be achieved by accomplishing the day-to-day tasks and responsibilities to: (1) account for and report on the status of the U. S. government’s budget surplus/deficit, "cash position", and financial condition; (2) oversee the maintenance of the U.S. Standard General Ledger; (3) develop a seamless process for consolidating agency financial statements into the Financial Report of the U.S. Government; and, (4) provide agencies with "one-stop" access to accounting information.
FMS is updating the systems and processes used to perform governmentwide accounting and reporting so that financial information to FPAs is provided much earlier than what is available currently. Beginning in January 2003, FMS began a phased process of requiring agencies to accelerate their month-end reporting to Treasury. The ultimate reporting requirement commencing in FY 2004 is for agencies to submit their final month-end reports, with no corrected or supplemental reporting, by the third business day after the month-end closure. This accelerated reporting will enable FMS to provide agencies with their trial balances and other financial data a week earlier than today. In conjunction with other improvements resulting from the GWA Modernization Project, program agencies will realize significant benefits from reduced reporting burdens and earlier, easier access to more useful information.
The next significant milestone of FMS' GWA modernization project is to provide FPAs access to their financial data through an Internet Web-based system. Using this system, FPAs will be able to obtain an account statement of their Fund Balance with Treasury within 24 hours after submission of their month end accounting data. Currently, FPAs cannot obtain this data until the 10th workday following the end of each calendar month. Projected completion of this milestone is October 2003. As additional system releases are implemented, the Account Statement will be available on a daily basis.
As part of the GWA modernization project, agencies will be required to report the Treasury Account Symbol (TAS) associated with their payment and collection transaction at the initiation of the transaction. This will require agencies to change their business processes and financial systems in order to capture and report the TAS at the outset of a transaction. In addition, FMS will need to modify its feeder systems which link its central accounting system without imposing any additional data collection and reporting requirements on program agencies.
FMS will also be developing an XML reporting process that will standardize the definitions, terms and reporting of federal accounting transactions. This will result in more streamlined and accurate reporting as well as reduce costs for maintaining the U.S. Standard General Ledger chart of accounts.
Objective: To strengthen federal financial management by improving the quality, timeliness, accuracy, delivery and integrity of government financial information and reporting.
Strategies: To achieve this objective, FMS will:
Objective: To facilitate the development of a knowledgeable federal financial community.
Strategies: To achieve this objective, FMS will:
Objective: To deliver quality products and services that are responsive to customers’ needs.
Strategies: To achieve this objective, FMS will:
Key External Factor Affecting Achievement of Goal
In accordance with the Government Management Reform Act, the Financial Management Service (FMS) has responsibility for preparing and publishing the consolidated Financial Report of the U. S. Government annually. FMS has been preparing this report each year since FY 1997. The report is prepared in accordance with Generally Accepted Accounting Principles (GAAP) and includes activities of the Executive Branch and portions of the Legislative and Judicial Branches of the U.S. government. By statute, GAO is required to audit and render an opinion on the financial statements. Beginning in FY 2004, the Financial Report will be issued on December 15, two and a half months after the fiscal yearend, as opposed to six months (March 31) in the past.
Key Partners in Achieving this Goal Include: Federal Program Agencies, OMB, GAO, Joint Financial Management Improvement Program, Federal Accounting Standards Advisory Board, Chief Financial Officers’ Council, Congress, Federal Reserve System, and the National Treasury Employees Union.
FMS meets on a continuous basis with OMB and GAO to set policy and direction for changing and improving the Financial Report. In that forum, FMS sets priorities and decides on the direction of its efforts for the next accounting year. In addition, FMS works through agency task groups to obtain feedback on any new changes/policies being planned. FMS also provides the CFO Council with any issues that may need to be addressed by that group and informs them of new or emerging issues.
Description of the Starting Point in the Current Year
The fiscal year 2002 Financial Report of the U.S. Government received a disclaimer opinion from GAO. The disclaimer opinion was due to material weaknesses at federal agencies related to financial systems, record keeping and financial reporting and a material weakness related to the preparing the Financial Report. The material weakness identified as part of the compilation process comes within FMS’ purview. Representatives from Treasury, FMS, OMB, and GAO made a series of recommendations to assist in solving the weakness. FMS is carrying out a multi-year effort to implement these recommendations and rebuild the process to prepare the Financial Report. The new process will be used for the FY 2004 Financial Report. Treasury and FMS worked closely with OMB to develop business rules for intragovernmental transactions that will establish standard processes and data elements. The business rules were effective in January 2003. The new preparation process and the business rules will mitigate the identified material weakness.
Our Approach to Achieving the Goal
FMS will continue to work cooperatively with GAO, OMB, and program agencies to eliminate the issues which prevent an unqualified opinion on the Financial Report of the U.S. Government. Recognizing that some issues preventing an unqualified opinion are not within FMS’ scope to resolve, FMS will nonetheless continue to assist agencies by providing guidance and support and enhancing processes for which it is responsible. FMS is developing a new process for preparing the Financial Report to meet the new accelerated timeframe and enhance the integrity of the Report. When implemented, the new process for preparing the Financial Report and new intra-governmental business rules will mitigate the material weaknesses in the current process.
FMS has also accelerated the reporting of month-end reports from federal agencies. This accelerated reporting timeframe will allow FMS to provide trial balances and other financial information much earlier than today and will help the agencies meet the November 15, 2004 deadline for issuing their FY 2004 financial statements.
FMS has also provided agencies more detailed information to help them reconcile their intragovernmental transactions with their federal agency trading partners. Beginning with the third quarter of FY 2003, FMS will require agencies to submit information on a quarterly basis related to intragovernmental transactions. FMS will process and synthesize this information and send information back to the agencies on various classes of intragovernmental transactions. This information will assist agencies in reconciling this data on a quarterly basis and should reduce the amount of effort at year-end.
Objective: To strengthen federal financial management by improving the quality, timeliness, accuracy, delivery and integrity of government financial information and reporting.
Strategies: To achieve this objective, FMS will:
Objective: To facilitate the development of a knowledgeable federal financial community.
Strategies: To achieve this objective, FMS will:
Key External Factors Affecting Achievement of Goal
The Financial Management Service (FMS) is committed to establishing policies and processes to facilitate the integration of e-commerce technologies into its infrastructure. These technologies are constantly evolving, and FMS will continue to keep pace with new developments. Emerging e-commerce technologies have allowed federal EFT payments—traditionally made via the Automated Clearing House (ACH), the Federal Reserve Fedwire System, and by credit card, to take advantage of stored value cards, electronic checks, electronic cash and the Internet. Likewise, electronic collections tools such as EFTPS and Pay.gov eliminates paper processing while providing better service to citizens.
Key Partners in Achieving this Goal Include: Federal Program Agencies, consumer and community-based organizations, government vendors, Federal Reserve System, Financial Institutions, Congress, Office of Management and Budget, General Accounting Office, and the National Treasury Employees Union.
Description of the Starting Point in the Current Year
Examples of how FMS has integrated e-commerce technologies into its infrastructure are:
Our Approach to Achieving the Goal
To develop a coordinated federal electronic commerce strategy, FMS will continue piloting emerging technologies; monitor current and proposed regulatory and legislative actions related to electronic commerce in the public and private sectors; educate and raise the level of awareness of emerging electronic commerce technology among FMS staff through self-directed research and through an electronic commerce news Intranet site; and partner with key stakeholders, such as banking regulatory agencies, financial institutions, and the public to gain an understanding of the impact of electronic commerce on these stakeholders. FMS will carry out its responsibilities under the Government Paperwork Elimination Act by providing policy and guidance to agencies on the use of certificate authorities, public key infrastructures (PKI), and electronic authentication for federal payment, collection and collateral transactions.
FMS will continue to be at the forefront in using new and emerging technology to conduct our business. FMS has made significant progress toward developing and implementing web-based systems to obtain and provide financial information to our customers and stakeholders, and applying advanced technology such as biometrics, digital signatures, knowledge-based authentication, and public key infrastructure to improve the quality and security of our data. Through its Electronic Money (E-Money) efforts, FMS tests and expands new payment and collection technologies such as the Internet Payment Platform, Pay.gov, EFTPS and other Internet and card technology. FMS has initiated E-Money programs to help federal agencies modernize their payment and collection activities.
FMS is continuing to develop and document our Business Enterprise Architecture. Our ultimate objective is to reduce the amount of duplicate and redundant data maintained in our various automated systems and to eliminate the development of "stove-pipe" applications in FMS. The result of this project should be fewer automated systems in the future which will reduce development, operations and maintenance costs, reduce reporting burdens on agencies and simplify and streamline customer access to FMS data. The development of the FMS Business Enterprise Architecture will also map to the Federal Enterprise Architecture.
Objective: To increase program efficiencies and reduce reporting and operational burdens by converting paper-based processes to electronic processes and by using new technologies.
Strategies: To achieve this objective, FMS will:
Objective: To promote and expand the use of electronic commerce technologies within the Federal financial community.
Strategies: To achieve this objective, FMS will:
Objective: To provide information products and services to customers and stakeholders in a safe and secure environment.
Strategies: To achieve this objective, FMS will:
Key External Factor Affecting Achievement of Goal
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