OVERVIEW

Introduction

The Department's Bureau of Resource Management (RM), headed by the Assistant Secretary for Resource Management and Chief Financial Officer (CFO), employs over 500 people around the globe--in Washington, Charleston, South Carolina, and Bangkok, Thailand. With five major operating units, the CFO oversees all strategic and performance planning, State operations budgeting and resource management, global accounting, disbursing and payroll, financial systems, financial policies, internal controls and issuance of the financial statements and "annual report" of the Department. The CFO also coordinates and leads the remediation of vulnerabilities within the Department's global critical infrastructure. RM produces a number of essential documents including the Joint State/USAID Strategic Plan, Department Performance Plan, Agency Financial Report, Budget-in-Brief, and the Congressional Budget Justification Document.

RM's customers are all embassies, consulates, and missions overseas, nearly 40 other U.S. Government organizations overseas, all domestic bureaus and employees of the State Department, and the Broadcasting Board of Governors. RM's services to its customers are critical in order that they can do their job to create a more secure, democratic, and prosperous world.

The CFO's mission statement is incorporated into the Department's strategic goal for Strengthening Consular and Management Capabilities.

IMPROVED FINANCIAL PERFORMANCE

Goals and Strategies

Improving financial performance means that the Department knows where every dollar comes from and where every dollar goes in a timely and accurate manner. Accurate and timely information is critical to managing our programs on a day-to-day basis, obtaining the best performance, and ensuring accountability to the American public. It is also a core competency of world-class organizations.

To do this, RM will:

Key measures of our success in this area are aligned with how OMB scores financial management related to achieving a "green" status rating on the President's Management Agenda (PMA). Other measures of success include:

Customer Service

Customer service is the hallmark of the Bureau of Resource Management. As the Department moves to a single world-class financial system, RM has redoubled its emphasis on customer service and support. The Overseas Post Support Desk, in addition to helping posts with implementation of financial systems and changes, has been expanded to become a state-of-the-art help desk for financial management professionals in the Department and in other agencies we service. As part of this effort, RM is moving the customer support function towards a 24/7 operation, leveraging our presence in time zones roughly equidistant around the globe (Charleston, Bangkok and Paris), and integrating former Washington-based operations into our customer support regime.

Building a Top-Notch Finance Team

Establishing a worldwide cadre of qualified financial managers presents a difficult challenge to the CFO. Unlike most other Government agencies, the CFO must manage the dynamics of three personnel systems that include financial management personnel: Foreign Service, Civil Service and Foreign Service Nationals (FSNs). Our primary strategy is to maintain a vigorous and active training program for financial management practitioners. We view the training program as critical — in implementing new systems, establishing RM as the lead bureau within the Department on financial management issues, and also in ensuring that information in the field is current and authoritative. In 2007, the training program was strengthened to provide overseas customers a full line-up of training opportunities. Our training program enjoys customer approval ratings in excess of 90 percent.

The Road Ahead

Looking ahead, State will continue to achieve fundamental "compliance" results. Moving beyond compliance-based results, State management is making decisions based on meaningful financial information to achieve better performance results in the form of lower costs, improved efficiencies and/or improved outcomes for agency mission.

State will also undertake other value added activities that support effective strategic decision-making and mission performance. These activities include:

• Enhancing management and internal controls. The Department maintains a robust system of management controls overseen by senior leadership and administered by RM. The Department's strong commitment to management controls has served as a positive catalyst for change and there are no material weaknesses reported under FMFIA. Recent events in the private sector have increased concerns related to financial management, and in particular on internal controls. To address these concerns, Congress passed the Sarbanes-Oxley Act of 2002, which establishes new demands for corporate accountability and includes several important sections related to internal controls for public companies. In December 2004, OMB revised Circular A-123, Management's Responsibility for Internal Control, to strengthen internal control in the Federal government. The Department fully implemented the requirements of revised circular A-123 in FY 2006, as required, and has continued to strengthen and expand the program in FY 2007, including establishing a new Office of Management Controls.
• Streamlining and consolidating global financial operations. In FY 2005, State completed a multi-year effort to consolidate and streamline our worldwide financial operations in our Charleston, South Carolina and Bangkok, Thailand locations. Building on this success, RM is expanding our Post Support Unit (PSU) in Charleston, SC to take on more of the burden of repetitive, standardized financial processing from the posts and perform those tasks centrally at a substantially lower cost. We will work with offices throughout the Department to seek additional opportunities to reduce costs by moving processing to the PSU. This will not only significantly reduce processing costs, but more importantly free up financial staff for higher value, active financial management at our Missions and offices worldwide, which is critical to better managing our rising costs.
• Leveraging best business practices and electronic technologies (E-Gov). The President's Management Agenda includes an aggressive strategy to secure better services at lower cost through electronic government (E-government). In the Department, we are advancing this E-Government strategy through projects that offer performance gains, such as E-Travel. E-Travel uses a web-based travel system solution (E2 Solutions) that provides electronic authorizations and vouchers, as well as on-line booking and ticketing, for temporary-duty (TDY) travel to minimize cost and improve customer satisfaction. E2 Solutions will replace the hundreds of stand-alone, stove-piped instances of our existing Travel Manager (TM+) System operating throughout the world. E2 pilots were conducted overseas and domestically in FY 2007, and user feedback has been positive. The E2 rollout will occur in phases, continuing throughout FY 2008 and concluding in FY 2009. The current plan is to deploy E2 at 60 posts in FY 2008. When fully deployed by the end of FY 2009, we will have a single worldwide TDY travel management process, fully integrated with the Department's financial systems.

FINANCIAL MANAGEMENT SYSTEMS

Implement a Global Financial Management System (GFMS)

For the past two decades, the Department accounted for its resources through multiple outdated and disjointed legacy financial systems. Some posts effectively conducted operations through the integration of little more than a collection of Excel spreadsheets. Often, it could take up to 45 days after a financial event occurred for overseas financial data to update the Department's Central Financial Management System (CFMS).

The Global Financial Management System (GFMS) project integrates the Department's overseas and domestic financial operations onto common financial management software platform in Charleston. This provides 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. This will dramatically improve operations and reduce costs by eliminating system redundancies and replacing obsolete and unsupported financial systems. It will also provide the infrastructure for integrating other administrative activities within the Department, such as the Integrated Logistics Management System (ILMS).

In FY 2007, State implemented the Global Financial Management System (GFMS) as the next step in our multiyear effort to establish a single global financial system. GFMS replaces the Department's 20 year old Central Financial Management System (our core accounting system) and centrally accounts for State's billions of dollars of finances through over 5 million annual transactions by 1,000 users and over 25 "handshakes" with other internal and external systems. Upgrading a financial system of this size and complexity is a large and challenging undertaking.

GFMS is based on the CGI Federal's Momentum financial management system. Momentum is a certified Federal financial system used widely in the Federal market place. GFMS uses the same software (CGI Momentum) and technical platform used by the Regional Financial Management System (RFMS) overseas and the Joint Financial Management System of USAID. As part of the implementation, GFMS integrates, for the first time, the Acquisition and Fixed Asset systems into a single software application. Also, a data warehouse and cost allocation module (for managerial cost accounting) were installed. GFMS will align our domestic financial management systems environment with the Department's enterprise architecture. By July 2008, we will have stabilized GFMS and established plans for our final step in establishing a single global financial system - combining GFMS and RFMS. By July 2009, we will be in the final stages of combining GFMS and RFMS, and together with our efforts on Global Direct Connect (detailed below), will begin FY 2010 with a virtual single global financial management system.

The diagram below depicts the state of our financial systems at the beginning of FY 2003 and the end state of our global vision for the beginning of FY 2008 and beyond.

D

Regional Financial Management System (RFMS)

RFMS is the global accounting and disbursing system that has been implemented for posts around the world, and the building block of GFMS. RFMS is comprised of a commercial-off-the-shelf, accounting system for funds management, obligation, and voucher processing, and the RFMS/D disbursing system developed by the Department for disbursing services. The successful worldwide implementation of RFMS replaced the obsolete Paris Accounting and Disbursing system (mainframe-based) used at FSC Paris and the Overseas Financial Management System (Wang-based) used at FSCs Charleston and Bangkok. RFMS incorporates State's standard account structure and improves transaction standardization and timeliness between RFMS and GFMS, which results in the consistent, timely processing and recording of financial data on a worldwide basis. In addition, the overseas interface was reengineered for RFMS and provides daily updates of overseas financial transactions to GFMS. These daily updates allow headquarters managers to ascertain the worldwide balance of our accounts on a daily basis, something never before possible.

In addition, RM enhanced its reporting tool called COAST which provides daily updates on all financial transactions to 168 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.

Global Direct Connect

Our Global Direct Connect initiative moves posts that have operationally practical and reliable network connections (estimated at over 85 percent of our embassies) from their current batch processing environment to a real-time, on-line connection. As a result of our efforts to date, there are now over 100 (out of a possible 180) posts using Global Direct Connect. Our plan is to implement another 25 posts to Global Direct Connect by July 2008. By July 2009, we will convert all remaining posts (with reliable networks) to Global Direct Connect.

Joint Financial Management System (JFMS)

The Department of State is implementing a Joint Assistance Management System (JAMS). The system will collect assistance information and will interface with the Global Financial Management System. JAMS will be based on a commercial product called "Grantium." Grantium was selected from a field of commercial products because of its ability to be easily configured for assistance processes. Other features include a robust reporting capability.

During FY 2006 significant progress was made on JAMS, and a proof of concept was conducted with support from both domestic and field users of Grantium. FY 2007 saw a second proof of concept to evaluate changes and upgrades resulting from the suggestions in the first session. Pilot deployments will begin in FY 2008, setting the stage for domestic rollout in FY 2009.

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