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COST MANAGEMENT INFORMATION SYSTEM

Office of the Chief Financial Officer. 1. Purposes of ITS CMIS . 1. Government Costs in Commercial Software2. Activity-Based Cost Accounting

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COST MANAGEMENT INFORMATION SYSTEM

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    1. COST MANAGEMENT INFORMATION SYSTEM Presented by Lisa Johnson, Chief, Financial Mgmt Branch, ITS

    2. Office of the Chief Financial Officer 1 Purposes of ITS CMIS 1. Government Costs in Commercial Software 2. Activity-Based Cost Accounting & Management 3. Cost-Based Budget Formulation & Execution 4. Cost Information, Reimbursement and Collaboration with SCA and other Customers 5. Performance Optimization & Efficiency Agenda to discuss how ITS, a government IT provider, has applied a commercial off the shelf cost reporting software.for cost reporting and management. Describe how CMIS accomplishes its purposes, and describe some of the reporting capabilities we are developing. Agenda to discuss how ITS, a government IT provider, has applied a commercial off the shelf cost reporting software.for cost reporting and management. Describe how CMIS accomplishes its purposes, and describe some of the reporting capabilities we are developing.

    3. Office of the Chief Financial Officer 2 CMIS Capabilities Developed chart of accounts for the new ITS Service Catalog Improved Methodology for direct and allocated costs Reports ITS costs to all management levels and customers. Extracts Monthly accounting DTRs and balances with Financial Reports Provides web-based reporting and analysis of costs Implements ITS cost metrics as approved by the IMOC Applies COTS Cost Management software to Government Enterprise Meets OMB criteria for cost management in President’s Mgmt Initiative

    4. Office of the Chief Financial Officer 3 CMIS Cost Metrics Each service offering has a unique cost metric associated with it. Direct costs are charged directly to service offerings and to customers. Indirect costs which are added to the Direct Costs are allocated to Customers by the metrics shown. Eventually we will work toward consumptive metrics which can be monitored during the year. Each service offering has a unique cost metric associated with it. Direct costs are charged directly to service offerings and to customers. Indirect costs which are added to the Direct Costs are allocated to Customers by the metrics shown. Eventually we will work toward consumptive metrics which can be monitored during the year.

    5. Office of the Chief Financial Officer 4 DTR Listing Total This chart shows the origin of the numbers in CMIS. The report shown is a Detailed Transaction Report from FFIS and the Financial Data Warehouse. We pull in year, month, account number, expenditures and budget object class information. This also shows how we validate that the data we pull into CMIS matches in total to the amount in FFIS. This chart shows the origin of the numbers in CMIS. The report shown is a Detailed Transaction Report from FFIS and the Financial Data Warehouse. We pull in year, month, account number, expenditures and budget object class information. This also shows how we validate that the data we pull into CMIS matches in total to the amount in FFIS.

    6. Office of the Chief Financial Officer 5 CMIS Output Matches DTR Total

    7. Office of the Chief Financial Officer 6 CMIS Cost Allocation Tables This table shows how the internal indirect cost pools are allocated to service offering. There are indirect cost pools at the Division, Branch and Service Line levels. Costs are encouraged to be charged to the lowest possible level and allocated the rest of the way. Division and Branch people provide the allocation percentages based on their estimate of their workload and how much each service offering is supported by their Branch. This table shows how the internal indirect cost pools are allocated to service offering. There are indirect cost pools at the Division, Branch and Service Line levels. Costs are encouraged to be charged to the lowest possible level and allocated the rest of the way. Division and Branch people provide the allocation percentages based on their estimate of their workload and how much each service offering is supported by their Branch.

    8. Office of the Chief Financial Officer 7 Metrics of Customer Demand (Workstations) This shows how the FY2006 workstations metric has state data which allows all indirect costs associated with service offerings allocated by workstations to allocate those costs down to the state level. If we had information about employees by state or the other metrics by state those indirect costs can also be allocated to states. Direct Charges are already directly allocated to statesThis shows how the FY2006 workstations metric has state data which allows all indirect costs associated with service offerings allocated by workstations to allocate those costs down to the state level. If we had information about employees by state or the other metrics by state those indirect costs can also be allocated to states. Direct Charges are already directly allocated to states

    9. Office of the Chief Financial Officer 8 CMIS FUNCTIONS Assigns and allocates FFIS DTR expenses of ITS Branches to Service Catalog, Customers and States Expenses are categorized by cost categories (Type) Direct/Integrated/Overhead Service Category (Communications, Hosting, End-User) BOC and Labor/Non-Labor categories Dimensional hierarchies and attributes enable many reporting options Allocation percentages can be changed with approval Assignment methodologies can be easily reviewed and adjusted Calculated results are reconciled with source data (DTR’s and G/L)

    10. Office of the Chief Financial Officer 9 CMIS POTENTIAL FOR ITS Enables ITS to operate and compete like a business Improves the management of costs and operations Able to access/drill into low level of data Can analyze/research data to identify errors Enhances control over data for reporting/billing Supports decisions on investment and efficiencies Supports budget formulation, submission, and justification Validates ITS’s costs compared to peer competitors Enables ITS managers to allocate resources effectively Budget Object Class information is available in the monthly reports at each of these levels. This information provides Salary, Benefits, Travel, Contracts, Equipment and all of Agriculture employed budget object classes Budget Object Class information is available in the monthly reports at each of these levels. This information provides Salary, Benefits, Travel, Contracts, Equipment and all of Agriculture employed budget object classes

    11. Office of the Chief Financial Officer 10 CMIS Report Menu

    12. Office of the Chief Financial Officer 11 Service Offerings Expenses by State

    13. Office of the Chief Financial Officer 12 CMIS Report Menu

    14. Office of the Chief Financial Officer 13 CMIS Expenses for States by ITS Office

    15. Office of the Chief Financial Officer 14 CMIS Graphical Output – Direct Costs CMIS can produce a graphical display of the summary data for presentation and review.CMIS can produce a graphical display of the summary data for presentation and review.

    16. Office of the Chief Financial Officer 15 CMIS Graphic – Indirect Costs Another display shows indirect costs. This FY2007 data shows far more indirect costs than we have in FY2008/9. We have made a deliberate effort to directly apply costs to services as determined by the ITS managers. Another display shows indirect costs. This FY2007 data shows far more indirect costs than we have in FY2008/9. We have made a deliberate effort to directly apply costs to services as determined by the ITS managers.

    17. Office of the Chief Financial Officer 16 CMIS IMPLEMENTATION PROCESS Initial CMIS Version was installed in July 2007. CMIS 14 for FY09 is updated for revised Service Catalog and emphasis on direct allocations of cost. Obtained ITFC/IMOC approval of metrics for FY2008 and 2009. Provides cost and variance reports of FY2008 to ITS managers. Developing policy and practices for operations and security. Training users for web access. Establishing cost management policies and practices. Expanding uses and user base. Obtaining continuous feedback from the ITS managers.

    18. Office of the Chief Financial Officer 17 CMIS MODEL STRUCTURE Periods = months, current yr, prior yr, budget years etc. Line items = obj clas, etc; Drivers = cost allocation factors; Equals 34.6B , Periods = months, current yr, prior yr, budget years etc. Line items = obj clas, etc; Drivers = cost allocation factors; Equals 34.6B ,

    19. Office of the Chief Financial Officer 18 CMIS REPORTS The following screens show the FY2009 CMIS data structure and the linkages that the model builder uses to produce CMIS output reports.

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