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U.S. Department of State

Diplomacy in Action

Financial Management Plans and Reports


Bureau of Resource Management
Report
November 15, 2011

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Overview

Introduction

The Department of State’s financial activities operate in approximately 270 locations in 180 countries. We conduct business transactions in over 135 currencies and even more languages and cultures. Hundreds of financial and management professionals around the globe allocate, disburse and account for billions of dollars in annual appropriations, revenues and assets. Among the Department’s customers are 45 U.S. Government agencies in every corner of the world, served twenty-four hours a day, seven days a week.

The Bureau of Resource Management (RM) is headed by the Department’s Chief Financial Officer who serves as the corporate financial manager and strategic planner. RM has overall responsibility for the preparation and execution of the budget; management of financial systems, reporting and internal controls; management of global financial operations and services; directing the Department’s strategic planning and performance reporting efforts; administering interagency administrative support cost sharing related to overseas missions; and coordinating interagency resource planning efforts with the intelligence community. RM produces a number of essential documents including the Joint State/USAID Strategic Plan, the Department Performance Plan, the Agency Financial Report, the Department Performance Report, A Citizen’s Guide to Foreign Affairs, the Joint Summary of Performance and Financial Information, the Executive Budget Summary, and the Congressional Budget Justification Document.

RM employs over 500 people around the globe, primarily in Washington, Charleston, South Carolina and Bangkok, Thailand. RM’s services to its customers are critical to carry out the Department’s mission effectively.

The RM management team and staff have a proven record of outstanding achievement as evidenced by (but not limited to):

  • Successful resourcing of all Secretarial-level priorities while simultaneously resolving a huge funding shortfall for current services;
  • Successful implementation of new financial management systems;
  • Successful implementation of a grading system to measure transparency and quality of budget requests for all interagency activities at post (ICASS);
  • Growth in requests for and use of the Post Support Unit as a centralized financial processing unit for overburdened post financial management staff; and
  • Implementation of Quality Management System under ISO 9001 standards and Capability Maturity Model Integration (CMMI) frameworks for core financial operations and systems.
MISSION

To integrate strategic planning, budgeting, and performance,
and to secure the resources necessary to
accomplish the Department of State’s mission.

The RM mission statement is incorporated into the Department’s strategic goal for Strengthening Consular and Management Capabilities. Pursuant to the CFO Act of 1990, this designation makes the CFO responsible for all financial management activities related to Department programs and operations. This overview relates to the CFO role and financial management responsibilities set forth under the CFO Act.

BUREAU OF RESOURCE MANAGEMENT GOAL STATEMENT

To establish worldwide financial services, integrate budget, planning and performance, and ensure that all RM employees know they play a crucial role in the success of American foreign policy.

Performance measures for this goal include timely financial reporting, elimination of material weaknesses in internal control, the achievement of unqualified (“clean”) audit opinions, elimination of improper payments, and implementing financial systems and processes that meet Federal requirements. In addition to these, RM endeavors to consolidate and standardize financial operations, leverage best business practices and electronic technologies, and build a first-rate finance team.

FY 2011 Results

Providing World Class Customer Service.

Central to our vision of a premier, global financial system is the worldwide cadre of financial managers who rely on our financial systems to conduct the Department’s business and support bureau missions. It is critical our systems meet the needs of this diverse customer base. Product review groups have been instituted to better enable us to work with our customer base, identifying priorities for improvements to systems, associated business processes, and support mechanisms.

We continue to receive high marks on the Overseas Customer Survey. Overall satisfaction with financial applications rose to 85% in 2011 from 83% in 2010. Consolidated Overseas Accountability Support Toolbox (COAST) reporting remains the leader in customer satisfaction, with 90% of respondents reporting favorably (up from 88% in 2010). Global eTravel’s e2 Solutions showed the greatest improvement, rising ten percentage points from 66% to 76%.

Implementing Resource Management Systems and Processes that Meet Federal Requirements.

Ongoing system improvements continued to contribute to the Department achieving a ‘Green’ rating on key monthly performance measures – 98% of invoices are paid on time; interest payment penalties are less than .01% of total Department payments; and the error rate for erroneous/duplicate payments is less than 0.15% of the Department’s total payments. These cost controls came about even as the volume of the Department’s overall transactions continues to rise.

All agencies are required to protect personally identifiable information (PII), including the elimination of the unnecessary use of Social Security Numbers (SSN) in their systems. To comply with this guidance, new coding schemes for eliminating the use of SSN as the vendor code were undertaken in the Regional Financial Management System (RFMS) and the Global Financial Management System/Momentum (GFMS). The systematic conversion of all existing SSN-based vendor codes in RFMS into non-sensitive codes was completed in July 2010 and the GFMS conversion was completed in March 2011.

To further improve controls and the accuracy of transaction funding references across our regional and domestic systems, a multi-phase project to provide real time integration between the Global Financial Management System (GFMS) and Regional Financial Management System (RFMS) was started in fiscal year 2011. This integration will eliminate complex, offline interfaces; ensure timely fiscal data and funds availability checks; and improve operational efficiency by avoiding costly rework generated by rejected batch transactions.

The first phase of this project was to integrate GFMS invoices, payments, direct disbursements (IPAC), and Working Capital Fund (WCF) charges. As transactions are entered in GFMS, real time referencing occurs verifying funding and accounting information. If the RFMS obligation does not have sufficient funds or the accounting information does not match, the document will not process. To test these new procedures, a pilot project started in July 2011.

Standardized Solutions Supported by a Global Architecture Framework.

FY 2011 also saw continued focus on consolidation of financial and other administrative systems as part of our ongoing efforts to standardize resource management systems, provide consistency across applications, and uniformly apply best practices for development and maintenance of our critical support systems.

Our Global Direct Connect initiative moves posts that have operationally practical and reliable network connections from their batch processing environment to a real time, on-line connection. In FY 2011, we successfully completed deployment of DirectConnect to eligible posts, replacing the batch connections at 17 remaining posts. All 183 eligible posts are now using Global Direct Connect to access the Regional Financial Management System (RFMS).

COAST Cashiering, the latest major enhancement to the COAST suite, will replace the legacy WinACS cashiering system. It improves upon the core functionality of WinACS including improved security for cashiering activities by enforcing greater adherence to the Department’s Foreign Affairs Manual and Foreign Affairs Handbook regulations and providing greater controls to financial management officers overseas. As part of the COAST suite of applications, COAST Cashiering seamlessly integrates with COAST Encryption, streamlining the certification, encryption, and submission of Cashiering transactions to the Global Financial Service Centers. Pilots are underway in Rome and Buenos Aires, with plans for pilot expansion through the second quarter of FY 2012. Full deployment is targeted to start in the fourth quarter of FY 2012 and be completed in FY 2013.

The Department’s Resource Allocation and Budget Integration Toolkit (RABIT) and the International Cooperative Administrative Support Services (ICASS) system were brought into RM’s existing portfolio of systems, incorporating each into RM’s disciplined and certified system development and maintenance organization.

RABIT is an application used by all the regional bureaus, as well as some functional and domestic bureaus, to prepare their operating budgets. It has gone through significant enhancements this year, including:

  • A new Public Diplomacy (PD) Resource Allocation Module allowing bureaus to plan, track, and report on resources devoted to PD programs while linking funding levels and performance outcomes;
  • A new Overseas Buildings Operations (OBO) module to capture salary costs and assist in preparing five-year budget formulations; and
  • Improvements to existing features and functions.

The ICASS system is the principal means by which the U.S. Government provides and shares the cost of common administrative support at its more than 270 diplomatic and consular posts overseas. The Department of State is the primary service provider and it offers these administrative support services to other agencies under its non-Economy Act authorities contained in 22 U.S.C. 2695 and 2684. In FY 2011, we defined and initiated a multi-stage strategy to rebuild the ICASS Software Platform to better meet the needs of its post and agency users.

Leveraging Best Business Practices and E-Government.

The Global eTravel initiative achieved significant migration success in FY 2011 by continuing to expand the use of a web-based commercially available off-the-shelf system (COTS) software. As of September 2011, all domestic bureaus and 155 posts have been migrated. These entities collectively generate over 96% of the Department’s temporary duty (TDY) travel volume. In the last 12 months, 15 customer-driven enhancements were delivered with new software releases.

The Department continued to make significant progress migrating to a Grants Management Line of Business (GMLOB) solution in FY 2011. The OMB’s lines of business initiative seeks to cut costs and improve service by consolidating computer networks and functions into a few agencies that would act as service providers to other agencies. Implementation of the Department of Health and Human Services’ (HHS) GrantSolutions system as the single, standard system for the Department will replace the collection of separate, stovepipe Federal assistance systems used across the Bureaus. Internally, we refer to this system as the State Assistance Management System (SAMS).

During FY 2011, the Department expanded deployment from one to thirteen Bureaus. By the end of FY 2012 the Department anticipates full deployment of SAMS to the approximately 12 remaining bureaus. The result is a single automated system that is integrated with the Department’s Global Financial Management System (GFMS). It will standardize the department’s assistance-related business process from solicitation through award and close-out ensuring a high degree of consistency and manageability as well as compliance with key U.S. Government initiatives such as Grants.gov and GMLOB, and reporting requirements such as the Federal Funding Accountability & Transparency Act of 2006 (FFATA) and the Federal Assistance Award Data System (FAADS).

The Department continued to execute a phased deployment strategy that — when completed — will completely replace six legacy payroll systems with a single, COTS-based solution that is better suited to address the widely diverse requirements of the Department and the other 45 civilian agencies that rely on the Department for overseas payroll. Not only will the Global Foreign Affairs Compensation System (GFACS) address common requirements in a more consistent and efficient manner, it will leverage a rules-based, table-driven architecture to promote compliance with the statutory differences found across the Foreign and Civil Service Acts and, perhaps more importantly, the local laws and practices applicable to the many countries in which civilian agencies operate.

Photo showing the new consulate in Dubai, United Arab Emirates.

The new consulate in Dubai, United Arab Emirates, has made possible the consolidation of offices scattered throughout the city of Dubai into a six acre compound to increase the efficiency and accessibility of its services to the public, including assisting American citizens and visa services. Department of State/OBO

December 2010 saw the first phase of GFACS placed into production with the implementation of the Foreign Service Annuitant payroll, replacing the legacy Foreign Affairs Retirement and Disability System (FARADS). Beginning calendar year 2011, 16,000 Foreign Service Annuitants and their beneficiaries have been paid monthly as a result of pension processing in GFACS. Work continues on the next phases of the GFACS deployment – the Locally Employed (LE) Staff and American payroll modules.

In FY 2011, RM opened the Sofia Post Support Unit (PSU). The PSU supports financial processing operations at posts abroad, remotely taking on the lower level financial transaction processing work for a post and allowing at-post financial management personnel to perform higher value-added and location- specific tasks. With the addition of the Sofia PSU, RM has further expanded its capabilities to provide centralized processing services to support additional posts and enable the wholesale systematic consolidation of some financial processes.

Looking Forward.

RM will continue to work to ensure fundamental financial management “compliance” results – on time, accurate financial statements that achieve an unqualified (“clean”) audit opinion, financial systems and processes that meet Federal requirements, and effective internal controls.

OMB continues its initiative to standardize government-wide business processes to address the Federal government’s long-term need to improve financial management and assist agencies in substantially complying with the Federal Financial Management Improvement Act (FFMIA). Also, over the next several years, a number of new Federal accounting and information technology standards will become effective. These include government-wide projects to standardize business requirements and processes, establish and implement a government-wide accounting classification, and support the replacement of financial statement and budgetary reporting to the Department of the Treasury. The Department’s implementation of new standards and government-wide reporting will strengthen both our financial and information technology management practices.

In FY 2012 and beyond, RM will continue to expand its centralized processing services to support additional posts and wholesale systematic consolidation of some financial processes.

RM will also undertake activities that support effective strategic decision-making and mission performance. These activities include strengthening the Department’s financial management analytic capabilities. With its financial data warehouse, RM will work to expand its analytical capability to provide the Department’s senior management with timely and thorough financial/cost analysis to support funding decisions. At a time when the U.S. Government (USG) is facing a significant deficit, the Department will undoubtedly be faced with some difficult choices over critical but competing priorities. Having the CFO establish or independently verify the fully loaded costs of programs or initiatives, with affordable cost alternatives and expected results, will be essential in maximizing the effectiveness of the Department’s funding. This ability to better quantify costs with results will also bolster the Department’s credibility with Congress and OMB.

Our long-term goal for resource management is a standardized and integrated set of worldwide systems that support process improvement and uniform delivery of timely, accurate, and meaningful information. We want to do this in an incremental way that builds on our successes. For our corporate resource management system investments, OMB has reviewed and approved our approach as part of its review of all agency financial system investments across the Federal Government.

We have embarked on a multi-year effort to consolidate resource management systems within RM and specifically within the RM/DCFO systems area. This includes budget systems, cost distribution systems, and post-level applications that were developed independently in the past. Ultimately, we expect our resource management systems to:

  • Meet user requirements;
  • Share a common platform and architecture;
  • Reflect rationalized standard business processes;
  • Be developed using CMMI similar to ISO 9000; and
  • Be compliant, controlled and secure.

In FY 2012, RM financial system initiatives include:

  • COTS Software Update – Global Financial Management System (GFMS). GFMS is based on CGI Federal’s Momentum™ commercial off-the-shelf product. Every year, CGI issues new releases to the Momentum software to comply with new Federal reporting requirements, respond to user enhancement requests, keep current with technology improvements, and correct system defects. In FY 2013, we will update our release of GFMS from version 6.0 to version 7.0. During FY 2012, user work group sessions will be conducted to review Momentum functional and technical enhancements to determine system configuration settings and business impacts. User work group sessions will also be conducted to improve the user interface through the use of configurable functionality to better meet our customers needs. This update effort will also see the introduction of automated independent testing through the use of an automated test tool package.
  • Integration Improvements. Through the GFMS/RFMS Virtual Merge initiative, RM will continue to leverage the platform’s Enterprise Service Bus (ESB) integration platform to improve business processes and lower the total cost of ownership of its financial systems. The next phase of the project will integrate GFMS and RFMS for vendor information and obligation documents. As GFMS references overseas allotments, the vendor and the obligation will be processed in RFMS automatically through the integration framework. We are also planning next steps for the integration of the Department’s Integrated Logistics Management Systems (ILMS) with RFMS, and have a standard procurement-to-pay business model.
  • Accounts Receivable Migration. When the Global Financial Management System (GFMS) was implemented in 2007, migration of accounts receivable from the existing legacy system (Domestic Accounts Receivable Tracking System - DARTS) was excluded to mitigate risk and keep the implementation scope manageable. Implementing Momentum Accounts Receivable is on schedule for early 2012. It will eliminate the custom DARTS interface and provide a cohesive fully integrated accounts receivable capability.
  • COAST Offerings. We will continue rollout of a much improved encryption capability and expand pilot deployment of cashiering capabilities through the second quarter of FY 2012. Full deployment of cashiering is targeted to start in the fourth quarter of FY 2012 and be completed in FY 2013.

The Department will complete its overseas deployment of Global eTravel in FY 2012. The Department’s next major customer enhancement for the system is scheduled for January 2012. It is a new release that will provide our travelers with streamlined, simplified, and intuitive methods to create, approve, and submit TDY authorizations and vouchers. This redesign is a culmination of extensive studies focused on improving usability and customer satisfaction.

Work will continue on deployment of the Global Foreign Affairs Compensation System (GFACS) deployment. Next will be the payroll module for Locally Employed (LE) Staff, with pilots scheduled to begin in calendar year 2012. As part of the GFACS investment, we also plan to implement a new web-based global Time and Attendance (T&A) product that will feature electronic routing, signature, and self-service features. Looking out further, deployment of the GFACS American payroll module is currently scheduled to occur in FY 2014.

The International Cooperative Administrative Support Services (WebICASS) is undergoing re-development in several incremental phases. The first phase is scheduled for deployment in May 2012 and will operate as a stand-alone application at post. It will include a new user interface to facilitate navigation through the application, new cost centers for Diplomatic Security (DS) residential guards, and technical architecture upgrades.

Financial Management Systems

Through the Joint Financial Management System Program, the Department is integrating its overseas and domestic financial operations onto a common, global financial management software platform in Charleston, South Carolina. This is dramatically improving operations and reducing costs by eliminating system redundancies and replacing obsolete and unsupported financial systems. It is also providing the infrastructure for integrating other administrative activities within the Department, such as the Integrated Logistics Management System, Global eTravel, State Assistance Management System, and other domestic and post-level systems.

The diagram below depicts the state of our vision, a virtual global financial management system.

The common platform underlying the Department’s global financial management solution is CGI-Federal’s Momentum™ financial management system. This solution uses the same software and technical platform to support the Global Financial Management System (GFMS) domestically, the Regional Financial Management System (RFMS) overseas, and USAID’s Phoenix financial management system. With the completion of Global Direct Connect in FY 2011, State has achieved a single integrated view of financial data through data standardization, common business processes, and the seamless exchange of information through the Department’s financial and administrative sectors. The GFMS and RFMS components of State’s solution are further described below.

Global Financial Management System.

The Global Financial Management System (GFMS) centrally accounts for billions of dollars recorded through over 5 million annual transactions by 1000+ users and over 25 “handshakes” with other internal and external systems.

GFMS is critical to State’s day-to-day operations. The GFMS supports execution of State’s mission by effectively accounting for business activities and recording associated financial information, including obligations and costs, performance, financial assets, and other data. It supports the Department’s domestic offices and serves as State’s repository of corporate data.

Regional Financial Management System.

RFMS is the global accounting and disbursing system that has been implemented for posts around the world. RFMS includes a common accounting system for funds management, obligation and voucher processing; the RFMS/D system to provide disbursing services; and the Consolidated Overseas Accountability Support Toolbox (COAST) post-based system for analysis, reporting and other post-level activities. The system incorporates State’s standard account structure and improves transaction standardization and timeliness between post and headquarters, which results in the consistent, timely processing and recording of financial data on a worldwide basis.

Financial Management Information to Improve Decision Making.

With the consolidation and streamlining of our worldwide financial systems operations, the ability to capture and maintain accurate, meaningful financial information, and provide it to decision makers in a timely fashion, has vastly improved.

To support overseas financial management officers and post decision makers, RM implemented COAST reporting in late FY 2006. In subsequent years, improvements were added to provide the capability to develop budget plans and monitor execution of those plans. Improvements were also made to the information “drill down” to allow significant flexibility in filtering and summarizing financial transactions. RM continues to enhance its COAST reporting tool, which provides daily updates on all financial transactions to more than 180 posts overseas and domestic bureaus, allowing them to analyze, and “slice and dice” their financial data for local reporting purposes using modern reporting and query tools on their local workstation. Future enhancements currently in progress will allow for access to payroll specific data at the post and bureau level, and will take advantage of COAST’s existing “drill down” and other reporting functionality. This will give Department financial managers far greater insight into payroll costs, including providing detailed reporting on overtime and other premium pay types.

Domestically, and in support of Department-wide reporting, RM implemented the GFMS Data Warehouse in FY 2007. Based on a modern, browser-based technology platform, the GFMS Data Warehouse enables users to access financial information from standard, prepared reports or customize queries and reports in real time to compile the financial information needed for informed decision making on a day-to-day basis. The GFMS Data Warehouse also provides, on a daily basis, critical financial information to the Department’s Enterprise Data Warehouse. In addition to adding and improving reports and queries, managerial cost accounting and acquisitions reporting modules have been added to the GFMS Data Warehouse since its inception. Plans for FY 2012 include expanding available content and further enhancing management reporting capabilities, including executive-level dashboard reporting. Upgrades to more current technology platforms will also occur in FY 2012.

 




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