Data on Financial Management Activities 40.1. General. Section 205 of the Chief Financial Officers Act of 1990 makes the agency Chief Financial Officer (CFO) responsible for the preparation and revision of the agency's financial management plan, and for development of the agency's financial management budget. Building on this statutory requirement, OMB issued guidance (OMB memorandum M-91-07) that requires agency CFOs to approve agency plans, budget formulation, and legislation affecting financial management resources at both the agency and agency-component levels. Information on funding levels for financial management activities is required for oversight and review of agency resources devoted to these activities and to assist OMB in preparing the Government-wide 5-year financial management plan required by the CFOs Act. This information, which represents inputs to the financial management function, will be reviewed in connection with other information submitted by agencies |describing their performance in the financial management function |(see section 15.4) and will be discussed with agencies. For these purposes, agencies are required to submit reports on resources for: --financial management activities (see section 40.2); and | --financial management systems (see section 40.3). 40.2. Report on resources for financial management activities. (a) Materials required.--Each agency covered by the CFOs Act is required to report budget authority and full-time equivalent (FTE) employment data for CY and BY for each of the following categories of financial management activities: | --asset management; | --accounting and reporting; | --audits of financial statements; and | --financial management systems. | Resources for both the CFO organization and other agency components |involved in financial management activities should be included, |without separate identification. | An original and two copies of the report, in the format of exhibit |40A, are required by September 9 (see section 10.3). The report should |be reviewed by the agency CFO before submission to OMB. Revised materials, reflecting final budget decisions, should be submitted promptly after those decisions are made. (b) Definitions of data to be reported.--Budget authority and FTE |employment data will be reported for the entries described below. |Resource estimates for financial management systems should be |consistent with information submitted in exhibit 40B. Resource information not based on other requirements of this Circular or on other easily-identifiable information should represent the agency's best estimate of salaries, contracts, or other major expenses to be reported. Allocation of overhead expenses is not required. ---------------------------------------------------------------------- Entry Description ---------------------------------------------------------------------- 1. Asset Includes resources for administrative expenses for management credit programs consistent with the levels reported for credit program accounts under credit reform (i.e., amounts requested as a separate appropriation for administrative expenses in credit program accounts); resources devoted to debt collection for non-credit receivables; resources devoted to cash management; and resources devoted to property and inventory management and control. ---------------------------------------------------------------------- 2. Accounting and Includes resources for processing and recording of reporting revenues, receipts, appropriations, apportionments, allotments, obligations, outlays, expenditures, assets, liabilities, and other financial transactions; reconciliation of asset and liability accounts, such as accounts or loans receivable, with subsidiary records and with external data, such as Treasury cash records; and funds control. ---------------------------------------------------------------------- |3. Audits of Includes resources for performing audits of |financial financial statements, with separate identification |statements for contract and in-house costs, as detailed in | exhibit 40A. Data on preparation of financial | statements are not required. ---------------------------------------------------------------------- 4. Financial Includes resources for financial management management systems, which consist of financial systems and systems financial portions of mixed systems necessary to support financial management. (See definitions of financial management systems in section 40.3) Data reported should be consistent with information reported on exhibit 40B. ---------------------------------------------------------------------- 5. Subtotal Include the sum of amounts reported on lines 1 through 4. ---------------------------------------------------------------------- 6. Adjustments (-) Include adjustments to eliminate doublecounting. For example, costs for a loan system reported under the "asset management " category may also be reported under the "financial management systems" category (consistent with reporting instructions for exhibit 40B). A list of the adjustments should be prepared, reviewed by the agency CFO, and provided as an attachment to exhibit 40A. ---------------------------------------------------------------------- 7. Total, net Equals the total of amounts on lines 5 and 6 (a minus entry). ---------------------------------------------------------------------- 40.3. Report on financial management systems. (a) Definitions.--For reporting purposes, agencies will use the following definitions. An information system is the organized collection, processing, transmission, and dissemination of information in accordance with defined procedures. Information systems include non-financial, financial, and mixed systems, as defined below. | A financial management system initiative requires a budgetary |investment that: a) creates a new system (a system that automates |previously manual functions or functions not previously performed by the agency), b) replaces an existing system or set of systems, or c) upgrades an existing system or set of systems (where an upgrade provides major enhancements to a system or systems that add significant functionality). A financial management system consists of financial systems and the financial portions of mixed systems necessary to support financial management. A financial system is an information system, comprised of one or more applications, that is used for any of the following: --collecting, processing, maintaining, transmitting, and reporting data about financial events; --supporting financial planning or budgeting activities; --accumulating and reporting cost information; or --supporting the preparation of financial statements. A financial system supports the financial functions required to track financial events, provide financial information significant to the financial management of the agency and/or required for the preparation of financial statements. A financial event is any occurrence having financial consequences to the Federal Government related to the receipt of appropriations or other financial resources; acquisition of goods or services; payments or collections; recognition of guarantees, benefits to be provided, or other potential liabilities; or other reportable financial activities. A mixed system is a system that supports both financial and nonfinancial functions of the Federal Government or components thereof. A non-financial system is a system that supports non-financial functions of the Federal Government or components thereof and any financial data included in the system are insignificant to agency financial management and/or are not required for the preparation of financial statements. | (b) Materials required.--Agencies will prepare a report, in the |format of exhibit 40B, providing information on financial management |systems, in accordance with the requirements in this subsection. Financial management systems covered include core financial systems as described in the JFMIP Core Financial Management Systems Requirements Document; financial and mixed systems critical to effective agency-wide financial management, financial reporting, or financial control; and financial and mixed systems appearing on the |high risk list in the most recent President's budget. The report will |provide information on obligations for PY and on budget authority and |FTE employment for CY through BY. Data on non-financial systems are |not required. | For each financial management system listed, agencies will indicate |if it is a financial or mixed system. An estimated percentage of the |total system obligations associated with the financial components of |the system must be reported. Estimated percentages must be based on a |reasonable assessment of the proportion of the system that is |financial. Agencies will also indicate whether each listed financial management system is a new system or includes an upgrade to an existing system. If the financial management system includes an upgrade, agencies will |identify the percentage of the system cost for the upgrade. FTE |employment should include Federal employees identified as directly |designing, developing, operating, or maintaining the system. | An original and two copies of the report are required by September |9. The report should be reviewed by the agency CFO before submission |to OMB. Revised materials, reflecting final budget decisions, should |be submitted promptly after those decisions are made.