Letter from the Chief Financial Officer
On behalf of the United States General Services Administration, I am pleased to provide the fiscal year 2015 Agency Financial Report. The AFR represents the culmination of our financial management community’s efforts to accurately track and disclose GSA’s financial status, and to ensure that the agency continues to act as a good steward of public funds. I would like to sincerely thank all GSA financial management personnel for their dedication, diligence, and excellent work in compiling this report, and throughout the year.
During FY 2015, the Office of the Chief Financial Officer (OCFO) pursued an aggressive transformation strategy to ensure more effective and efficient oversight of GSA’s finances. Our approach focused on the three core elements of management: organizational structure; business processes and technology; and capabilities / services. I am proud to report that significant progress has been made in executing our transformation strategy, resulting in substantial improvements across all three focus areas (as detailed in the following sections). OCFO’s three key achievements for FY 2015 include:
- Designed and implemented the migration of Financial Management Line of Business (FMLOB) services in a compressed timeframe of six months, including transitioning nearly 300 positions to the shared service provider. OCFO has also successfully collaborated with GSA IT to complete the migration of core financial systems.
- Deployed the OCFO reorganization strategy, creating functionally-aligned organizations that maintain business unit focus to promote greater accountability, effectiveness, and efficiency in operations.
- Enhanced the enforcement of OCFO internal controls by modifying the audit remediation approach. The OCFO made significant strides in collaboration with other GSA organizations to correct the root cause of prior year audit findings, resulting in the elimination of a prior-year material weakness.
OCFO took aggressive action in FY 2015 to improve organizational structure.
- OCFO Central Office was restructured to consolidate core financial functions into single offices. The new Office of Budget, Office of Business and Financial Analytics, Office of Financial Management, Office of Strategic Planning and Performance Management, and Office of Regional Financial Services were launched in June 2015 to focus accountability for performance on individual leaders, and to remedy structural impediments resulting from past migrations of staff from business line organizations. Our new structure will enable more efficient service delivery to our customers and decrease the number of handoffs in our key business processes.
- PBS and OCFO collaborated on a design and reorganization strategy for regional financial services. To mitigate the collective action problem of managing 11 different regions, OCFO’s reorganization strategy consolidates into four geographic zones with supervisory and oversight functions for PBS regional financial services. Beginning in FY 2016, the reorganization strategy standardizes divisional structures within the four zones to drive consistency in business processes and the application of financial controls. A new division – the Financial Management Division – will be established in each Zone to promote greater oversight of internal controls, increase audit response and support, and collaborate with the Central Office – Office of Financial Management, which is currently tasked with enterprise-level management of the audit response, internal controls, and corrective action planning.
Business Processes And Technology
OCFO implemented key business process and systems improvements to increase the efficiency and effectiveness of financial operations and controls.
- Leveraging the newly optimized organizational structure, OCFO is improving the consistency of enterprise-wide financial processes and the accuracy of financial and budgeting data through process redesign and systems implementation initiatives. The Office of Budget has achieved a more streamlined budget formulation process through implementation of the Financial Planning Application (FPA) and the design of governance processes that ensure consistent budget deliverables and timelines across GSA.
- After receiving the results of the KPMG external audit, OCFO senior management took a more proactive approach to address and correct audit findings. The Office of Financial Management worked closely with the Management Control Oversight Committee (MCOC), which includes senior leaders from PBS, FAS and GSA IT. The MCOC created a new process for preparing and executing Corrective Action Plans (CAPs). The CAP development and execution process is designed to address the root cause of audit findings, implement changes to prevent the errors from reoccurring, and create monitoring processes to evaluate the effectiveness of the corrective actions. The status of CAP execution is briefed to the MCOC on a monthly basis. This revised process has yielded significant improvements in the internal controls governing financial management:, and those efforts will continue in FY 2016 to further strengthen the control environment.
- Another focus area for OCFO is enhancing the degree of automation associated with financial data and to improve accuracy and efficiency. OCFO’s current work on the Billing and Accounts Receivable (BAAR) initiative will enable GSA to retire the legacy National Electronic Accounting and Reporting (NEAR) system which has been in operation for nearly 40 years. The implementation of BAAR will establish one consolidated billing system that streamlines the billing process, supports paperless billing, and incorporates one consistent format for enterprise-wide billing. Additionally, the OCFO made significant progress in FY 2015 collaborating with GSA IT to implement an EASi interface that seamlessly integrates PBS business systems with GSA’s financial system of record – Pegasys. The Electronic Acquisition System Integration (EASi) interface will substantially reduce the amount of manual data entry for OCFO analysts, allowing for reallocation of resources and improved timeliness/accuracy of contract data.
- The OCFO instituted a GSA-wide process for reviewing investments that included a robust review of project costs and return on investment. All business cases were reviewed by agency leadership through a formal process in order to ensure that the business case made financial but also strategic sense for the organization.
Capabilities And Services
OCFO adjusted its capabilities and service offerings to align with customer needs and federal requirements.
- As part of the overarching OCFO transformation, the organization has identified and designed new capabilities to better align our structure with business and customer requirements. To improve coordination of audit responses and collaboration with the external auditor, OCFO established an Audit Branch with a dedicated Audit Liaison within the Office of Financial Management. The Office of Business and Financial Analytics was also established as a new capability for OCFO. The Office is tasked with consolidating and enhancing the reliability and accuracy of GSA’s financial data to improve enterprise-wide decision making. The Office includes a data management division, business-line analytics groups, and an OCFO Quality Division dedicated to process improvement.
- In accordance with OMB Directive M-13-08, OCFO divested financial transactional work to a shared service provider at the USDA in March 2015. As part of a coordinated strategy to refocus OCFO’s support on more complex analytical functions, and to align with the government-wide effort to leverage shared services for cost savings, GSA transferred accounting and related financial reporting functions to USDA. OCFO is working diligently to establish a collaborative and close relationship with USDA to ensure optimal financial services, and to increase long-term cost savings.
- OCFO is committed to facilitating better connectivity and visibility between performance management and budget processes to enable decision makers to make more informed tradeoffs on resource allocation. To further this goal, OCFO established the Office of Strategic Planning and Performance Management. This new office provides enterprise-wide performance management and strategic planning guidance and coordination. One key initiative completed by the office was redesigning the quarterly enterprise performance review process of metrics for all Service and Staff Offices within the Administrator’s Suite.
As OCFO continues its transformation strategy, FY 2016 will bring many challenges in finalizing the implementation of our organizational structure, continuing to make planned improvements in our technology and business processes, and making key investments in our capabilities and staff. This is an exciting time for GSA OCFO and we hope to make great progress. I sincerely appreciate all the support received from staff as we work to improve our operations and ensure GSA remains a good steward of public funds.
Chief Financial Officer
November 10, 2015