OMB updates core financial-system requirements

The Office of Management and Budget has updated core financial-system requirements that agencies must fulfill to meet federal guidelines to better manage their programs under the Federal Financial Management Improvement Act.The updates reflect recent changes in regulations and central agency reporting systems, such as the Treasury Department’s new Governmentwide Accounting program, said OMB Controller Linda Combs in the document released today. Agencies disburse more than $2 trillion annually. Financial and program managers need access to detailed financial information to formulate budgets, monitor program operations and report performances in a reliable financial system. Core system functions include managing a general ledger, controlling spending, making payments, tracking costs and reconciling the agency’s fund balance with the Treasury. “This update demonstrates a strong commitment by the federal CFO community to continually improve the quality of financial services,” Combs said. Agency chief financial officers and the CFO Council’s Financial System Integration Committee participated in developing the requirements. The update outlines new provisions, clarifications of existing requirements and elimination of outdated terms.The Framework for Federal Financial Management Systems describes the basic elements for integrating financial-management systems. This update lays out the performance goals, outcomes and capabilities that future financial-management system should meet. It also describes financial-management functions, information flows and systems that support agencies in carrying out programs and central agency roles. It links financial management to program performance and describes how it supports budget and performance integration. Under OMB Circular A-127, agencies are to establish a single integrated financial-management system, periodically review the system capabilities and provide for an ongoing improvement planning process.Among the financial-system requirements are application of internal controls to ensure the accuracy of data, completeness and consistency of transaction processing and reporting. OMB expects that agencies will integrate automatic internal control capabilities to meet A-123 provisions, required by the end of this fiscal year, into their financial-management systems. For example, there are core financial-system requirements that specify that agencies perform validations on invoice data before they are certified.