Financial Management Systems: OMB's Financial Management Line of Business Initiative Continues but Future Success Remains Uncertain
Highlights
In March 2004, the Office of Management and Budget (OMB) launched the financial management line of business (FMLOB) initiative, in part, to reduce the cost and improve the quality and performance of federal financial management systems by leveraging shared service solutions and implementing other reforms. In March 2006, GAO reported that OMB's approach did not fully integrate certain fundamental system implementation-related concepts and recommended OMB take specific actions. This report discusses (1) OMB's progress in addressing GAO's prior FMLOB recommendations and implementation challenges and (2) the effectiveness of OMB's monitoring of financial management system modernization projects and their costs. GAO's methodology included reviewing OMB's FMLOB-related guidance and reports and interviewing OMB and Financial Systems Integration Office (FSIO) staff.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Office of Management and Budget | To assist oversight efforts specifically related to federal financial management systems, the Director of OMB should take actions to facilitate complete and accurate reporting of actual and planned spending related to financial management system modernization projects, including the financial portion of mixed systems that significantly support financial management functions, and make necessary changes in existing guidance to meet these needs. |
Closed – Implemented
In July 2010, OMB revised guidance requiring agencies to report information on capital assets and information technology (IT) investments. According to new guidance contained in OMB Circular No. A-11, Part 7, Section 300, agencies are required to list each financial system funded within each IT investment and specify whether the type of financial system is a core financial system, procurement system, loan system, grant system, payroll system, budget formulation system, billing system, or travel system. In addition, according to Section 53 of this guidance, agencies are required to specifically identify IT investments that are core financial systems and, for mixed systems, identify the percentage of funding that relates to core financial system functions. If fully and effectively implemented, OMB's revised guidance should help assure more complete and accurate reporting on federal agencies' actual and planned spending on financial management system modernization projects.
|