Army moving to compliance with the chief financial officers act.
The CFO Act of 1990 (Public Law 101-576) was signed into law by President George H. W. Bush on November 15, 1990. It mandates that the chief financial officers of agencies covered by the Act develop and maintain agency financial management systems that comply with
* applicable accounting principles, standards, and requirements;
* internal control standards; and
* requirements of the Office of Management and Budget (OMB), the Department of the Treasury, and other regulatory and standards-setting organizations.
The CFO Act focuses on the government's responsibility to use timely, reliable, and comprehensive financial information when making decisions. The Act was significant financial management legislation; however, over the ensuing 20 or more years, the Congress also mandated financial management reform through other legislation, including the Federal Financial Management Information Act (FFMIA).
Despite good intentions and past efforts to improve its financial management systems, the Army financial management leadership concluded that compliance would require replacing its legacy systems. So in the first years of this new century, the financial management leadership began framing the requirements for a new financial system. The goal was to develop and implement a single, integrated financial accounting and cost accounting solution that would meet not only external auditing requirements but also internal decision support requirements of the Army.
A financial and cost accounting solution for an organization the scope, size, and complexity of the Army required a Major Automated Information System acquisition. In June 2005 the Army completed the approval process and immediately began work on the solution--GFEBS.
GFEBS is designed to satisfy the statutory requirements of the CFO Act. The system integrates financial, real property, and other asset, cost, and performance data in a commercial off-the-shelf, web-based Enterprise Resource Planning solution. GFEBS standardizes business processes and transactions across the active Army, the Army National Guard, and the Army Reserve. The system provides real-time visibility of transactions, as well as historical data in a business warehouse, thus furnishing an integrated, analytic foundation for decision making. GFEBS is the first cost accounting system for Army-wide application.
In June 2006, a year after development began, the GFEBS Project Manager and Systems Integrator presented a proof of principle to the Army financial leadership and obtained approval to proceed. The development strategy involved a phased approach that permitted rapid implementation of new capabilities as they became available. The development strategy also ensured that enhancements would be added seamlessly as subsequent capabilities became available.
The development involved a series of releases and the spiraling of emerging capability to the Army's financial community. Development oversight and quality assurance are furthered by a proactive governance and participation strategy. Governance includes monthly council of colonels reviews with participation by all implementing organizations, a process owners group that also meets monthly, and a general officer/Senior Executive Service-level executive steering committee that meets quarterly.
The GFEBS development is nearly complete and supports 98 percent of the requirements defined for the program. The remaining requirements mostly are for debt management and interfaces with logistics systems releases 1.4.3 and 1.4.4, which will complete system development in the first quarter of fiscal year (FY) 2012. In addition to compliance with provisions of the CFO Act and FFMIA, the development process has included proactive compliance with DoD Business Enterprise Architecture concepts and designs, such as the Standard Financial Information Structure and the Real Property Information Management data structures.
The GFEBS team continually has engaged the Army Audit Agency (AAA) in frequent attestations of the solution. The AAA's Attestation Report: A-2010-0187-FFM, notes that the system is " ... substantially compliant with the portion of the applicable FFMIA requirements, identified in the Financial Management Systems Requirements Manual, Version 6.0 (January 2007) for functionality deployed through the Release 1.4.0 test event. GFEBS is appropriately building toward substantial compliance with the FFMIA when fully deployed." Of 1,113 financial accounting requirements in scope, all but 59 have been successfully demonstrated, and the remaining requirements are planned for releases 1.4.3 and 1.4.4.
The GFEBS solution is at the cornerstone of the Army's Financial Improvement Plan (FIP). The FIP incorporates the DoD Financial Improvement and Audit Readiness Plan and guidance, as well as other audit guidance. The FIP focuses on audit readiness and ensuring that the Army can produce an unqualified audit opinion by synchronizing audit readiness activities and tracking progress with GFEBS deployment. Audit readiness activities include identifying and reviewing business processes, creating a test strategy for the business process, conducting the test and analyzing test results, and developing and implementing corrective actions. The Army is conducting audit examinations at the current GFEBS locations to ensure that these activities are being administered properly in support of audit readiness goals.
Deployment and implementation pose many challenges because the solution involves processing as many as one million transactions a day by as many as 70,000 end users in hundreds of organizations and at more than 200 sites across the United States and worldwide. Therefore, deployment also involved a phased approach referred to as "crawl, walk, and run." This began with an initial implementation at one organization and one location. Lessons were learned and assimilated into the development and deployment strategy. The deployment then proceeded through the first four of eight waves, with the remaining four waves to be completed between now and January 2012. The deployment to date includes more than a dozen principal commands with numerous subordinate organizations at over 50 sites and about 15,000 end users.
The Army's FY 2010 year-end closure of its General Fund accounting records was the second successful fiscal year and seventh successful fiscal quarter closure. The FY 2010 year ended with over $4.2 billion disbursed, zero Anti-Deficiency Act violations and with balanced proprietary and budgetary accounts. The year ended with zero Negative Unliquidated Obligations, and the system was available to process FY 2011 transactions at 12:01 a.m. on October 1.
During FY 2010, GFEBS successfully interfaced with over 38 partner systems. The following metrics provide an indication of the volume of work processed:
* 1,484,812 transactions were processed with the Funds Control Module to obtain logistics support for Army forces with a 99.1 percent success rate.
* 164,649 travel authorization transactions were processed with the Defense Travel Service (DTS) with 99 percent success rate.
* 88,599 travel voucher transactions were processed with the DTS with a 95 percent success rate.
With Waves 5 through 8, the Army will add nearly 40,000 more end users around the world, including active Army and Army Reserve sites in the continental United States, as well as Hawaii, Japan, Korea, Europe, and Army Central Command sites, and all 54 states and territories for the Army National Guard.
GFEBS will provide the Army with the following:
* A financial accounting system that complies with statutory and regularity requirements for funds control, accounting, and auditing, to include real property and other asset data for depreciation
* Visibility of the transactional and budget execution data in real or near-real time
* A cost accounting system that identifies full cost by allocating overhead and other indirect costs to outcomes, outputs, and services, and connects operational performance data to the cost data
* A management and decision support system that records financial and various other transactions in a single system
* Visibility of the transactional data in real time or near-real time
* A wealth of trend, comparative, and other analytic data
The GFEBS solution meets the requirements of DoD Business Priority 5: Strengthen DoD Financial Management by improving the Army's ability to audit DoD financial activities and provide access to timely, relevant, and reliable financial and cost information for fact-based, actionable management decisions. With its implementation, GFEBS
* lays the foundation for the Army to receive an unqualified audit opinion on its annual general fund financial statements;
* enables the Army to conduct more cost-benefit and other types of cost analyses as well as to transition to a cost culture; and
* facilitates more thorough, fact-based analyses for both current-year operational performance and future programs and budgeting decision making.
So after 20 years since enactment of the CFO Act of 1990, by implementing the General Fund Enterprise Business System, compliance is within the Army's grasp.
BY KRISTYN E. JONES, CDFM, AND FRANK A. DISTASIO
KRISTYN E. JONES, CDFM Kristyn E. Jones is the Director for Financial Information Management, Office of the Assistant Secretary of the Army (Financial Management and Comptroller). A member of the Senior Executive Service, she holds a bachelor of science degree from the United States Military Academy and an MBA from George Mason University. She is a Certified Defense Financial Manager and a graduate of the Federal Executive Institute.
FRANK A. DISTASIO, JD Frank A. Distasio is president of Distasio Associates Ltd. and currently the communications lead on the GFEBS project. For the past decade, he has authored the Association of the U.S. Army's annual Federal, DoD and Army budget analysis book. A retired Army civilian, Mr. Distasio holds a juris doctorate degree and is a graduate of the U.S. Army War College and the Defense Management Program at Harvard University.
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|Author:||Jones, Kristyn E.; Distasio, Frank A.|
|Publication:||Armed Forces Comptroller|
|Date:||Mar 22, 2011|
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