Financial Management and Analysis
I. FINANCIAL MANAGEMENT SYSTEMSIn October 2003, the Department completed the implementation of its financial management system, the Commerce Business System (CBS), formerly known as the Commerce Administrative Management System (CAMS). CBS replaced non-compliant legacy financial systems within the Department. Bureaus that were previously on compliant systems continue to use those systems with some entities potentially converting to CBS at a future date. The financial information from these systems and CBS is integrated in the Corporate Database (as discussed further below) for consolidated financial reporting, resulting in a single integrated financial system. A Consolidated Reporting System (CRS) integrates existing management data from financial, human resource, acquisition, and federal assistance enterprise databases, and provides senior management with online desktop access to information about bureau programs and resources that is critical to strategic decision-making. CBS provides reliable and timely information within a sophisticated security infrastructure. The system is capable of producing both financial and budget reports from information generated within the financial management system. CBS includes a Core Financial System (CFS) interfaced with administrative systems for small purchases, bankcards, grants (Automated Standard Application for Payments [ASAP]), a data warehouse, and time reporting/labor cost distribution module, collectively called Core CBS. Planned is an obligation and requisition interface between CBS and the Commerce Standard Acquisition and Reporting System (CSTARS), the Department’s acquisition system. The Corporate Database is a commercial off-the-shelf software package for consolidating financial data and producing financial reports. The Corporate Database provides an integrated solution to financial statements and Federal Agencies Centralized Trial Balance System (FACTS I) Adjusted Trial Balances reporting at the Department, bureau, and Treasury Appropriation/Fund Group level, and also provides the ability to perform data analysis. The database was updated in FY 2004 to produce the Department’s footnotes, financial analysis reports, and other additional information required for the government-wide financial statements. During FY 2005, the Department accomplished the following initiatives:
Although the Department has an integrated financial system with the implementation of CBS and the Corporate Database, there is still a need to look forward to ensure that it continues to provide reliable, timely, and accurate financial data to management. In FY 2006, the Department plans to accomplish the following:
The Department is already looking beyond FY 2006 in an effort to plan improvements to its financial management systems and operations, including:
II. FINANCIAL REPORTINGThe Department is committed to making financial management a priority and significant efforts are being made to further improve the management of its financial resources. The Department has received unqualified opinions on its consolidated financial statements since 1999. In addition, one bureau subject to individual audit has maintained unqualified opinions on its principal financial statements. The Department met or exceeded the accelerated financial statement submission deadlines for FY 2005. These achievements resulted from the Department’s commitment to strong management controls and accountability for its resources. Two reportable conditions were cited relating to some identified deficiencies in general information technology (IT) controls remaining from the prior years and one bureau’s controls over reporting Construction-Work-in-Progress. Although the Department did not identify any significant problems with erroneous payments, it recognized the importance of maintaining adequate internal controls. The Performance and Accountability Report (PAR) section, Improper Payments Information Act of 2002 (IPIA), and the Appendix on the IPIA reporting details describe the Department’s implementation efforts of this Act along with the results of Commerce’s reviews. The Department accomplished the following initiatives that resulted in meeting the aforementioned goals:
Although the Department has accomplished much in the area of financial management, there is still a need to improve upon these accomplishments to ensure that the Department produces and reports accurate, reliable, and timely financial information. In FY 2006, the Department plans to accomplish the following:
GRANTS MANAGEMENTThe Department is an active participant with the government-wide implementation of Public Law (PL) 106-107 (The Grants Streamlining Initiative) to simplify and automate the grants process, including participation on various interagency workgroups. The Department’s Office of Acquisition Management (OAM) coordinates quarterly Departmental Grants Council meetings and works closely with the OIG and General Counsel to implement sound policy and ensure consistency for the Department’s financial assistance programs. The Department is committed to the goal of strengthening its grant operations and improving its business processes to provide better services to its customers in the federal grant recipient community. An active partner in e-grants initiatives, OAM serves on the Grants.gov Executive Board and the Grants Line of Business Taskforce and participates on workgroups and pilot activities. The Department is now fully compliant with Grants.gov, and has revised its Grants and Cooperative Agreements Manual and Standard Grants Terms and Conditions to recognize the emerging growth of electronic government. Integral to the Department’s effort to move aggressively into the world of e-grants is the continued utilization of the National Oceanic and Atmospheric Administration’s (NOAA) Grants Online System, a back-office solution to the Grants.gov’s storefront. The system, which went live in January 2005, was designed to facilitate efficiencies through standardized business processes and provide a direct interface to other Departmental systems. It has demonstrated significant potential for reducing paperwork, increasing accountability, simplifying the application process, and is being considered for enterprise-wide implementation. The Department has taken additional steps to adapt its operational structure and business processes to the streamlined vision of federal grants operation expressed in PL 106-107. During FY 2005, OAM has undertaken a high-level reengineering survey of the Department’s grant operations in an effort to develop a more interactive, synergistic enterprise-wide model for federal assistance programs in the emerging electronic environment. The goal is to create a performance-based culture utilizing value-added business processes with maximum use of automation for improved timeliness and quality of service delivery. OAM’s efforts to facilitate the approval of indirect cost rates for award recipients continued throughout FY 2005. OAM continued working with a contractor in reviewing applications submitted to the Department for indirect cost rate determinations, and made significant progress in facilitating the approval of indirect cost rates for award recipients throughout the fiscal year. In addition, OAM incorporated new audit and risk management features into the program and looks forward to reaping the benefits of these efforts in FY 2006 and beyond. HUMAN CAPITALThe Department recognizes the need to ensure succession planning in the area of financial management and to enhance the current workforce development. The Department provides internships through a variety of sources to give finance and accounting majors an opportunity to gain hands-on accounting experience, while introducing potential future employees to the opportunities that exist at the Department. In FY 2005, the Department initiated a two-year career internship program for college level graduates interested in pursuing a career in federal accounting. A total of 11 candidates are currently participating in finance related training courses and rotational assignments throughout the Department and its bureaus. The Department continued its partnership with the National Academy Foundation (NAF) by employing finance interns from local high schools and participating in NAF sponsored events. In addition, the Department initiated a panel of subject matter experts, consisting of representatives from the bureaus, to review the current accounting position descriptions, performance plans, and hiring criteria to ensure that the Department hires and retains high quality accountants.
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