intergovernmental transactions (igt) initiative - asmc · speaking engagements and user symposiums...

Intergovernmental

Transactions (IGT) InitiativeMs. Mary Kemp, OUSD (C) BIO

Mr. Michael Bolin, U.S. Treasury Bureau of the Fiscal Service

- 2 -IGT-IPP Initiative May 20, 2015

The IGT Problem – at the Federal & DoD Levels:

“A major reason for the disclaimer is the government’s inability to adequately account for and reconcile intra-governmental transactions between departments and agencies. This reform activity supports effective financial management through the achievement of a clean audit opinion; the elimination of material weaknesses; and the production of timely, accurate financial information to help guide decision-making.”

Office of Management and Budget, Executive Office of the PresidentSource: Federal Financial Management 2009

“DoD financial management systems cannot produce the transaction-level details and supporting documentation necessary to reconcile buyer and seller data and support IGT eliminations on the applicable DoD financial statements.”

Source: DoD IG Report No. DODIG-2015-056


BLUF

One of DoD’s key material

weaknesses is an inability to

reconcile inter/intra-

governmental (IGT) activity and

balances

Unsupported JVs for intra/inter governmental (IGT) buy/sell ~ $54 billion 2nd quarter, FY15


IGT – also know as…

• Military Interdepartmental Purchase Requests (MIPRs)

• Reimbursables

• Buy/Sell Transactions

• Interagency Agreements

• IPAC


Technically – What is an IGT out of balance?

RequestingAgency

ServicingAgency

Goods and/orservices

Out of balance


$-

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

FY15-Q1

FY15-Q2

in B

illio

ns

FY15-Q1 FY15-Q2

Supported Adjustments $0.20 $0.20

Unsupported Adjustments $39.36 $54.10

IGT Eliminations - Journal Vouchers

FY15-Q1 FY15-Q2

Supported Adjustments $204.6M $202.3M

Unsupported Adjustments $39.36B $54.10B

Supported & Unsupported Entries – IGT JVs


Or…the 5 whys of the IGT material weakness:

• Lack of Standards

• Decentralized

• Incompatible Systems

• High Volumes

• Worldwide


At a Glance: DoD as the Buyer - CY14

-00

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

GSA - $825M

DHS - $1.1B

Dept of Treasury - $27B

OPM - $492M

Dept of Energy - $191M

Dept of Trans - $311M

HHS - $226M

DOJ - $272M

State Dept - $218M

Dept of Commerce - $49M

T

R

A

N

S

A

C

T

I

O

N

V

O

L

U

M

E


At a Glance: DoD as the Seller - CY14

-00

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

GSA - $2.4B

Dept of Energy - $828M

NSF - $33M

Dept of Interior - $554M

DHS - $$412M

DOJ - $$183M

USDA - $55M

GPO - $50M

Dept of Treasury - $$290M

State Dept - $1B

T

R

A

N

S

A

C

T

I

O

N

V

O

L

U

M

E


Challenge Requirement

Lacking documentation for auditProvide for a data warehouse of IGT transactions for audit,

research and analysis

Buyer and seller transactions and accounting

are out of balance, unable to reconcile (in part

due to lack of common identifier)

Need common identifier to synchronize buyer and seller

accounting transactions (including proper general ledger

treatment) using clearinghouse methodology

Proof of receipt and acceptance Require appropriate users to record receipt and

acceptance, preserve for audit

Buyer and seller not in full agreement on terms

and details transactions

Automate handshake and agreement between buyer and

seller before settlement (reduces chargebacks)

Prompt response to audit findingsNeed affordable and rapidly delivered solution to meet DoD

audit readiness campaign plan

Lack of visibility of current status of IAA

including remaining period of performance,

available funding, unfilled orders, filled orders

and paid orders

Must preserve association and provide a common identifier

for all transaction components throughout life cycle of

agreement, and provide a consolidated view of the

information

DoD transaction volumes and diverse systemsMust handle DoD volume and interface with DoD systems

using DoD Global Exchange solution and SLOA

Summary - Challenges and Requirements


DoD To-Be Environment


Invoice Processing Platform

Enabling “controlled” E2E IGT transactions

Reengineering the IGT business process

Leveraging Treasury’s shared service

Systems & Business Controls = Auditability


Charter and Policy

PROJECT CHARTER

POLICY MANDATES

August 2013 Memo: Implementation of the Invoice Processing Platform for Buy-Sell Reimbursable

Transactions

April 2015 Memo: Implementing the Invoice Processing Platform for Intra-governmental Buy-

Sell General Terms and Conditions (GT&Cs)


Change Management

Develop Implementation Outreach

IPP-IGT Implementation Guides

Unified Communications Strategy

Online Presence for the IGT Module of IPP

Speaking Engagements and User Symposiums

Distance Learning and Train-the-Trainer

Strategy

FM Career Workforce Training Modules

Standards & Policy

Approval of Buy/Sell IGT Views in DoD Business Enterprise Architecture

Guide revisions to applicable Laws, Regulations, and Policies, and Provide Implementing Instructions from FIAR Guidance

Development and Oversight of Management Internal Controls Programs (OMB A-123)

Metrics

Improve Quality of Information

Principles of TQM and Lean

Create Integrated Project Plan and Schedule

Monitor & Report on Project Status

Establish SMP & Project Metrics & Produce Reports

Data Requirements

Intergovernmental Data Standard

IPP for IGT Business Rules

GEX Data Mapping

IPP for IGT Reporting Capability

System Change Requests

Future State IPP/IPAC

Governance Structure

Data Requirements

Standards & Policy

MetricsChange

Management

It’s all Important!


Key Enablers to Success

IAA

GEXSLOA

& PRDS

Abrasion

Creative Resolution

Creative Agility


DoD System Interface Connections (Pre-GEX)


Post-GEX


DoD To-Be Environment


IPP Addresses DoD’s IGT Challenges


IPP Addresses DoD Audit Findings

Finding FY15 Requirement IPP Requirement IPP

Existing RWO Audit Findings:

- “(Reporting Entity) has not been able to isolate…RWO transactions from the rest of the (Reporting Entity) financial transactions”

- Transactions were recorded in the improper period (NFR 2014-RWO General-001)

- Improper recording of (Reporting Entity’s) Intra-appropriation (APPN) reimbursable activity (NFR 2014-RWO-002)

- Lack of sufficient audit evidence to substantiate transactions (NFR 2013-RWO-003)

- Improper recording of collections (NFR 2014-RWO-004)

- Lack of routine tie out of feeder systems to the GL accounts. (NFR 2013-RWO-005)

1. Develop a MOU with each trading partner and agree to terms including receipt and acceptance, reconciliations, adjudication of required adjustments, and KSD retention

2. Identify a universe of transaction level detail for each trading partner.

3. With DFAS assistance, perform monthly reconciliations of transaction level detail with the trading partner to identify variances at the MIPR level.

4. Adjudicate the variances and identify adjustments required to align the transaction level detail for each trading partner.

5. Perform and record appropriate receipt and acceptance procedures

6. Maintain KSDs, per the MOU, which support the transaction level detail as well as receipt and acceptance

Provide for a data warehouse of intra-governmental transactions for audit, research and analysis

Need common identifier to synchronize buyer and seller accounting transactions (including proper general ledger treatment) using clearinghouse methodology

Require appropriate users to record receipt and acceptance, preserve for audit

Automate handshake and agreement between buyer and seller before settlement (reduces chargebacks)

Must preserve association and provide a common identifier for all transaction components throughout life cycle of agreement, and provide a consolidated view of the information

DOD IG Findings:

“Inaccurate and unsupported intra-governmental account balances continues to be one of the long-standing material control weaknesses preventing DoD from achieving audit readiness on the DoD Agency-wide basic financial statements.” – Report No. DODIG-2015-056

“DFAS personnel should use supportable transaction-level details (that is, the actual elimination amount) to reconcile and eliminate IGTs.” – Report No. DODIG-2015-056

Must handle DoD volume and interface with DoD systems using DoD Global Exchange solution and Standard Data Sets


Six Month Outlook

APRIL MAY JUNE JULY AUGUST SEPTEMBER

Kickoff and Conduct Pilots

25% Reimb. Auth. On IPP

GT&Cs

Development of Enterprise

System ECPs

50% Reimb. Auth. On GT&Cs

Release GT&C Memo

Draft Intra-governmental Data Standard

(IGDS)

Release IGDS for Review

IPP-IGT Implementation

Memo

Receive and Analyze IGDS

Feedback

Development of Enterprise GEX

Maps

MILESTONES

Milestone Occurrence

LEVEL OF EFFORT

Less

More

PRIORITY

Lowest

Highest

PHASE

PlanningDevelop-ment

Policy


Federal Strategy for Software VendorsOracle

One working group session First round of recommendations to be

submitted 2-June

SAP Three working group sessions Identification of SAP T-codes for IGT Recommendations for IGT solution in SAP

Momentum Two working group sessions Comprehensive analysis to the detail

level of IGDS (recommendations for additional fields, XML tag info, etc.)

Federal Intra-

governmental Data Standard

Sessions included review of the DoD-proposed solution to a data standard for

intra-governmental transactions

A data standard across the Federal government simplifies and mandates a

single requirement for COTS software


Questions ?


Mary L. Kemp is lead accountant in the Business Integration Office, Office of the Under Secretary of Defense (Comptroller). She has 30+ years of service as an auditor, budget analyst, accountant, and systems analyst with Department of the Army, Defense Finance and Accounting Service and OUSD(C). She is a past president of ASMC’s CNY Leatherstocking Chapter, a Lean 6 Sigma Green Belt, Certified Defense Financial Manager, and DoD Financial Management Level 3 certified. She just completed her Master's Degree coursework and will graduate in June from the National Defense University.

Mary L. Kemp – OSD(C) Business Integration Office

24


Michael Bolin is a veteran of the United States Army (Active Duty), having served ten years. He worked for JP Morgan Chase for one year and has been with the Department of Treasury’s Bureau of the Fiscal Service for nine years. Mr. Bolin served as the EagleCash Program Manager, leading the roll out of the system to numerous contingency areas overseas. He currently leads Treasury’s IPP Intra-governmental deployment effort as the Program Manager, working closely with DoD. He has a Bachelor’s degree in business from Villanova University and an MPA from the University of Maryland College Park. Mr. Bolin also holds a PMP certification.

Michael Bolin – Treasury, Bureau of the Fiscal Service

25

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