By Max Cacas
Reporter
Federal News Radio

It could be said that Danny Werfel, comptroller for the Office of Management and Budget, is clearly among his peers when discussing the future at the Association of Government Accountants Leadership Breakfast.

Yesterday morning, he mapped out the philosophy behind the change he wants to see in federal financial management, and how his colleagues in both the government and the industry that supports it will have to change as well.

As we define a transformational vision of how to improve, it’s only going to be acceptable if there are critical “moments of truth” along the way. Six months from now. Twelve months from now. Eighteen months from now, where we’re having success around key things that matter to the public such as savings, eliminating waste, and producing relevant information so they can understand what’s going on with government finances .

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Werfel wants the federal financial management community to shift into a higher gear when it comes to doing a better job of managing the nation’s finances and making those improvements happen sooner rather than later.

“The worst thing you can hear,” he told the AGA breakfast, “is, ‘we’ve got an initiative we’re planning. It’s going to go live five, six years from now, and that will be the first time in that window when we’ll start getting the return on our investment.’ I don’t think we have time to invest in something that’s not going to return results more immediately than that.”

Werfel talked about a fairly recent event that he considers “an under-reported success at the Treasury Department”. Auditors reviewing the $700 billion TARP program to rescue banks and other large financial institutions recently awarded a “clean audit opinion with no material weaknesses” to the financial bailout plan. That phrase constitutes the highest “grade” that can be awarded to any institution, public or private, whose financial records have undergone rigorous review by an independent team of auditors.

Just as the Treasury was able to do, on very short notice and within a very short time frame, with the TARP program, Werfel now feels the government financial management community must also do with more routine improvements in systems it uses daily.

Federal News Radio has learned that some of the functions of the old Federal Systems Integration Office, FSIO, will relocate to the new Office of Financial Innovation and Transformation (OFIT) at the Department of Treasury. FSIO is expected to shut down today. We attempted to contact OMB for comment, but had not heard from their communications office by the time this story was posted.

One of the functions that had been supervised from FSIO: certification and testing of financial management software systems. Werfel says it’s time that changes were made to the way that federal agencies handle modernizing their financial management systems:

It is no longer unusual, unfortunately, for a financial management system deployment in government to take five years, seven years, eight years. It’s taken longer than a decade in some situations. The costs are going up: five hundred million, six hundred, eight hundred million, some exceeding one billion dollars. We do not believe it should be as expensive or take as long to deploy these systems.

Werfel went on to say that when financial management solutions take that long to implement, it creates a “Catch-22” technology gap, because any technology that takes five to six years to deploy will likely be out of date by the time the system is complete and fully operational.

The OMB comptroller says he favors a more scaled-down approach to FMS modernization.

“We envision smaller-scale, quicker, incremental improvements to get at the key business needs that are needed for modernization rather than a big, long process to fix multiple business needs all at once.”

Werfel also says OMB is exploring the possibility of the Treasury Department becoming a central, government-wide resource for activities like issuing vendor invoices and generating financial statements — all in an effort to be more efficient and save money.

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