Accelerated Reporting: How did Treasury Do It?

1. Accelerated Reporting:How did Treasury Do It?

2. Overview • Background on Treasury Accounting and Systems • Treasury’s Acceleration Efforts

3. Financial Management Service Internal Revenue Service U.S. Mint Bureau of the Public Debt U.S. Secret Service(DHS) Office of Thrift Supervision Departmental Offices Bureau of Alcohol, Tobacco & Firearms(DOJ) Comptroller of the Currency U.S. Customs Service(DHS) Bureau of Engraving & Printing Federal Law Enforcement Training Center(DHS) Financial Crimes Enforcement Network Treasury Bureaus ATF, Customs, and the IRS account for approximately 98% of all revenues collected by the federal government

4. Look How Far We Have Come • 1995– Unaudited Department-wide Statements – Issued 9/1996 • 1996 - 1st audit of Department-wide financial statements. Qualified opinion issued 3/28/1997 • 1997- Department-wide consolidated financial statements – Qualified opinion issued 3/27/1998 • 1998- Department-wide consolidated financial statements – Qualified opinion issued 3/3/1999 • 1999– Department-wide consolidated financial statements – Qualified opinion issued 2/29/2000(Parallel FARS). • 2000– FARSused to compile consolidated financial statements 1stunqualified opinion issued2/28/2001 • 2001– FARS used to compile consolidated financial statements with automation of many notes supplemental information. Unqualified opinion issued 2/27/2001 • 2002 – FARS matures. WebTIER debuts in March 2002. 3-day close & 45 day year-end close

5. Problem/Solution The Problem: Need to efficiently compile financial statements and management information. The Solution: Utilize a data warehouse as a source of information.

6. Financial Analysis and Reporting System (FARS) Objectives: • Improve the Department’s Analysis of Financial Data Provided by Bureaus • Accessing and Mapping Financial Information from a Common Location • Communicating Information Across the Department • Produce Timely and Accurate Consolidated Financial Statements

7. DEDICATED FINANCIAL DATA SERVER(S) FOR: - Accounting/Budget Execution Data - Web Servers for TIER and CFOV - Other Future Data Subsets CS FLE SS DHS BUREAU DATA FIN TFF Financial Analysis and Reporting System (FARS) • CFO Vision and other On-line Analytical • Processing (OLAP) Decision Support Tools • 6 Financial Statements • Monthly Financial Management Report • Generated Footnotes & Supplemental Info CORE FINANCIAL SYSTEMS 1998 - (48) 2003 - (23) CFO Vision • WebTIER • General Ledger Account Data • Budgetary Data • Detailed Data Edits • FACTS I Transmissions • FACTS II Transmissions WebTIER IRR BEP BPA,BPF ESF FFB FMD IRS MNT OCC OIG TTB BPD TREASURY BUREAU DATA TIG CDF DO OTS OAS DCP FMS

8. TIER • 1994 Built Pilot in Oracle v6 - SQR Reports • 1999 Migrated to Oracle v7 Database • 2001 Began Project to web-enable Oracle 8i Database • 2002 January, Began parallel testing • 2002 March, Deployed WebTIER to Production

9. Scrubbing it Clean • Is all the Data Garbage? – No! But when you combine it with clean data the whole collection is tainted • Establishing Ownership –Who has the knowledge and is going to use the data? • Capturing what is Needed – SGLs & Attributes • Overcoming Resistance – Are you really going to make this work? • Edits – Pay me now or pay me later

10. Current FARS Capabilities • Collects Standardized Bureau Financial Data in Treasury Information Executive Repository (TIER) • Allows for Analysis of Financial Data on a Monthly Basis - Finance and Budget Data Models • Provides Reports for Bureau and Department level users • Prepared Financial Statements for FY 2000 - 2003 With Clean Audit Opinions • Many Footnotes and Supplemental Info now automated

11. Additional Benefits of FARS • Moves CFO Organization from Annual Reporting to Monthly Financial Analysis - Improves Data Quality - Answer Audit Inquiries During the Year - Increases Analysis Flexibility • More Timely Financial Reporting - 3-Day Close - Enhances Reporting Capabilities - Submit Government-wide Treasury Data

12. So What! This isn't World Class

13. Project Background • As of Jan. 2001 it was taking bureaus and reporting entities 20 working days to submit monthly financial data into Treasury’s Financial Analysis and Reporting System (FARS) • World class organizations close their monthly books in 3 days • On April 11, 2001 Secretary O’Neill challenged the Department to achieve a 3-day close no later than July 3, 2002

14. What is a 3 Day Close? • All financial data transmitted into the Financial Analysis and Reporting System (FARS) by 5:00 pm EST of the 3rd business day of the month • Development of Treasury financial statements and reports on the morning of the 4th business day The original deadline for the 3-Day Close was 7:00 pm on the 3rd Business Day

15. 3-Day Close Guidelines • Move from 20 days (January 2001) to 3 days (July 3, 2002) • No interim targets – get there as quickly as possible • Reduction of cycle time should be achieved through process improvement • Do what you can, when you can • Quality of data to be improved • Early month-end cutoffs not allowed • No issue or impediment is insurmountable

16. Project Success Measures • All Treasury bureaus and reporting entities will move to a 3-day closing of the monthly books no later than July 3, 2002 • All data will be reported on a monthly basis • All data will be without mechanical problems and proper accounts will be used • Monthly Treasury financial statements and reports will be produced for distribution • Customers will be satisfied with the resulting financial statements and reports • Annual audited financial statements produced by November 15 each fiscal year

17. A Month is a Month is a Month All months should follow the same basic process/schedule = = May June September You should be capable of doing a virtual year-end close any month of the year

18. 3-Day Close Versus Accelerated Year-End Close You should not view the 3-day Close and the year-end close as separate initiatives They go together hand-in-hand like peanut butter and jelly 3-Day Close = Accelerated Year-End Close

19. The Bureau Evolution on 3-Day Close • Is he crazy??? • But this ain’t ALCOA. • He’ll forget about it. • OK, he’s not going to forget about it. • Wait a minute… • This might be what we need. • What a great idea!!!

20. Average Submission

21. Data Quality - June

22. Quarterly Reporting? No Problem We produce our financial statements every month on the 3rd business day of the following month

23. Critical Success Factors • Management Commitment • Involving Auditors/Inspector General (Note: Treasury had 2 IGs and 6 IPAs) • Communication • Departmental Data Warehouse • Resolving Common Issues/Problems • Process Analysis and Documentation • Measurement and Reporting • Reward and Recognition • Full-time Program Management

24. Benefits Identified By Bureaus Closing in 3 Days • Data has become more timely, accurate, and meaningful • Better communication with internal and external organizations • More time to perform analysis and focus on other things • Surfaced and reengineered old and inefficient processes • Forced them to work more efficiently and put the previous month “to bed” earlier • Identified and resolved key system fixes • Restructured some of their contracts so that they are getting more timely information from contractors • Moved a monthly cost meeting a week earlier in the month • Helped with budget execution and seeing the status of funds Thanksgiving and the Holidays

25. Key Lessons Learned For Other Departments and Agencies • In order to accelerate year-end reporting, you must reengineer/improve your monthly processes • You must change the mindset of the accountants/staff that it is acceptable to work with estimates and accruals • Don Hammond would like to see you in the lobby if you have not started your acceleration efforts yet