OMB proposes accounting standards

The Office of Management and Budget today released a draft of a common governmentwide accounting classification structure. It is among initiatives designed to standardize business processes and data elements in support of the Financial Management Line of Business.The Financial Systems Integration Office in the General Services Administration, which coordinates with OMB on guidance related to the Financial Management Line of Business, expects that the will help promote broad understanding of data elements and help agencies standardize accounting codes internally.The common accounting classification structure will eventually be incorporated in requirements for core financial management systems so that software products will be configured to support the structure, the draft said. An agency will likely adopt the finalized structure when it implements a new financial management system, makes major upgrades to an existing certified system or moves to a shared-services provider. Adoption of the common accounting classification structure will be mandatory.The common accounting classification structure establishes a standard way to classify the financial effects of government business activities. It includes data elements needed for internal and external reporting, and provides flexibility for specific agency needs. Standardization aims to reduce the cost and improve the accuracy of data that financial management systems produce.Although a number of standards already exist, they provide latitude for each agency to develop its own classification structure. As a result, classification structures vary by agency and sometimes within agencies.The proposed standard classification structure identifies and defines the elements, names them where appropriate, promotes consistent use and establishes a uniform structure for capturing them. Comments are due Jan. 17, and a discussion session is set for February.