A Model for Realignment and Consolidation: Applying BRAC Principles to the Federal Financial Management and System Environment

7/28/2019 A Model for Realignment and Consolidation: Applying BRAC Principles to the Federal Financial Management and S

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SUMMER 2013 VOL. 62, NO

GovernmentFinancial Systemsand Technology


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Contents

4 JOURNAL OF GOVERNMENT FINANCIAL MANAGEMENT SUMMER 2013

12 Shared Finance Serices and Standardization:Can One Size Fit All?By: Daid A. Fitz, CGFM, CPA, PMP; Stee A. Johnson, CGFM,CPA, CGMA; and Jerey C. Steinho, CGFM, CPA, CFE, CGMAThe stars are aligning in the eoltion o shared serices. Standardization

and economies o scale enable CFOs to drie ot sbstantial costs and

shit their ocs to actiities creating greater ale in accomplishing

agency missions. So, take p the banner moe to shared serices.

Yes, one size can ft all!

20A Model or Realignment and Consolidation:Applying BRAC Principles to the Federal FinancialManagement and System EnironmentBy: Carlos A. Otal, CPA; and Ward MelhishIn 2013, ederal bdgets are shrinking and cost saings are needed more

than eer. One saings strategy is throgh the consolidation o fnancial

management systems. Bt how shold we consolidate? This article

defnes a ale-based Financial Realignment and Consolidation (FRAC)

ramework to qantitatiely assess fnancial system ale and proide

objectie recommendations or consolidation.

28 How Adit Technology Can Help Federal AgenciesConqer the Improper Payments ConndrmBy: Jim GloerFederal agencies are reqired by law to adit their operations and to

identiy and recoer payments issed in error. Technology soltions

drawn rom todays adit serices indstry can help organizations speed

the process, while docmenting reslts and proactiely protecting

against tre improper payments.


3/920 JOURNAL OF GOVERNMENT FINANCIAL MANAGEMENT SUMMER 2013

B: Carlos A. Otal, CPA; ad Ward Melus

A MODEL FOR

REALiGnMEnT AnDCOnSOLiDATiOn:APPLyING BRAC PRINCIPLES TO THEFEDERAL FINANCIAL MANAGEMENT

AND SySTEM ENVIRONMENT

An UnSUSTAinABLESiTUATiOn

The race to cut ederal agencybudgets is at a ever pitch. Through-out scal year 2013, the tighteningo belts could be heard throughoutthe beltway as the words sequestra-tion and scal cli became real.Based on the FY2013 budget, theCongressional Budget Oce (CBO)estimates that the decit will likelyincrease by $2 trillion, resulting ina cumulative decit o $3.2 trillion

in the 20182022 timerame.1 Giventhis, ederal agencies are taking aresh look at curtailing the growtho the decit, and initiatives such asoutsourcing and shared services are

back en vogue. The nancial man-agement and systems environment,with its duplicative operations andcostly investments, has been targeted

by the Oce o Management andBudget (OMB) and the U.S. Depart-ment o the Treasury (Treasury) as awell-known, unsustainable situationthat is ripe or cost savings.


4/9SUMMER 2013 JOURNAL OF GOVERNMENT FINANCIAL MANAGEMENT 21

The U.S. Government Accountabil-ity Oce (GAO) warned in 2012 that,until agencies routinely assess theirIT investment portolios to identiyand reduce duplicative systems, thegovernments current situation o hav-ing hundreds o similar IT investmentswill continue to exist.2 This is why, atAGAs 2013 Federal Financial SystemSummit, and through OMBs publica-tion o Memorandum M-13-08, Improv-ing Financial Systems Through SharedServices,OMB declared a renewed com-mitment to a long-term shared servicesstrategy or nancial managementconsolidation and modernization.This renewed commitment representsthe latest in a series o attempts by theederal government to improve theeciency and eectiveness o nan-

cial management operations, and thereturn on system investments.

ThE nEED FOROPTiMizATiOn

To anticipate whats ahead, it helpsto examine the governments his-tory o nancial system moderniza-tion and consolidation eorts. Pasteorts have been unsuccessul whenmeasured by widespread adoptionor by the material reduction in theinstances o nancial management

systems. Examples include: the JointFinancial Management ImprovementPrograms (JFMIP), Federal FinancialManagement System Requirementsprogram, and the Financial SystemsIntegration Oces (FSIO), Finan-cial Management Line o Business(FMLoB). These programs aced amyriad o challenges that led to mar-ginal, but hardly exceptional, results.

Challenges included:

f Emphasis on enterprise ratherthan modular solutions;

f Big bang implementations ratherthan incremental, stage-gateapproaches;

fTechnological improvementsthat out-paced implementationtimelines;

fTendency to retain customized,non-standard processes andunctionality; and

f Insucient emphasis on changemanagement/leadership.

These challenges garner much othe attention. Too little attention ispaid, in our view, to the successesachieved in both the public- and pri-vate-sectors through the use o sharedservices and sotware as a service(SaaS). These eorts may oer a roadmap o best practices to be appliedto the current nancial managementsystems and processing environ-ment. Specic examples include: theestablishment o Investment ReviewBoards at numerous ederal agen-cies including, the U.S. Departmento Deense (DoD), the Securities andExchange Commission, and the U.S.Department o Commerce, as wellas the consolidation o non-nancialinrastructure through the DeenseBase Realignment and Closure

(BRAC) process.

WhERE DO WE GOFROM hERE?

The 2013 budget environment pres-ents a resh opportunity to addressthe long-standing challenges created

by a widely-dispersed, and largelyredundant, nancial managementinrastructure. However, beore wedive head rst into the eort, somecore questions must be answered:

f

Recognizing our collective pastsuccesses and ailures, how shouldthe ederal government moveorward with nancial systemmodernization eorts?

fWhat is the appropriate rame-work to apply to limit redundancy,consolidate unctions and achievecost savings?

A POTEnTiAL SOLUTiOnStanding as a prime example o how

progress can be made in the arena onancial management and systemconsolidation is DoDs reduction o

base inrastructure since the end o theCold War. The BRAC approach suc-cessully reduced the cost o operationswhile overcoming signicant politi-cal, cultural and practical challenges.The applicability o this approach tonancial system consolidation liesin evaluating a set o similar objects(whether nancial systems or bases)against the underlying capabilities andattributes in order to identiy redun-

understanding theBRAC ProcessDuring periods ollowing a major military conict,

it is common practice to capture fscal beneft

through a decrease in deense spending; and

one major area o ocus is on excess inrastruc-

ture. Through the tool o public law,3 Congress

established the mandate to reduce military

inrastructure by establishing BRAC Commissionswhich conducted fve rounds o BRAC in years

1988, 1991, 1993, 1995 and 2005. The process

was refned through each successive round, but

the undamental approach remained consistent:

DoD careully evaluates and ranks each base

according to a published plan or the size o uture

military orces and to published criteria, adopted

through a rule-making process prior to each round.

The criteria included, (1) mission value, (2) return

on investment, (3) environmental impact, and (4)

economic impact on the surrounding communities.

DoD consolidates input rom each military branchand recommends actions to an independent BRAC

Commission or closure and realignment. The

independent Commission, aided by GAO, perorms

a parallel, public review o these recommendations

to ensure that they are, indeed, consistent with the

departments orce structure plan and selection

criteria, and then submits recommendations to

Congress or fnal approval.

Through attributes o transparency, objectiv-

ity, and independence, the BRAC process has

provided a platorm or the military branches to

implement meaningul adjustments in DoDs basestructure while ensuring overall mission capabili-

ties are not adversely impacted. Over the course

o fve BRAC rounds, DoD implemented a total o

119 major base closures as well as the realign-

ment o 87 major inrastructure capabilities with

a projected 20-year net present value savings o

over $100B, as shown in Figre 1.4

Figure 1:BASE CLOSURE AnDREALiGnMEnT COST COMPARiSOnS,19882005

BRACRond

Net AnnalRecrringSaings

20-year NetPresent vale

Saings

1988 $0.9 $8.5

1991 $2.0 $22.6

1993 $2.6 $26.3

1995 $1.7 $16.6

2005 $4.2 $35.6

ProjectedTotal

$11.4 $109.6

All values are in billions of dollars



Figure 3:nOTiOnAL FinAnCiAL REDESiGn AnD COnSOLiDATiOn (FRAC) APPROACh

dancy and excess. Admittedly, theBRAC environment eatured larger,more complex sets o objects and eco-systems, but nonetheless, BRAC wasable to overcome a similar situation tothat o nancial systemsentrenchedinterests that impede the ability toeliminate redundancy. Consider theparallels identied in Figure 2.

The BRAC process worked or DoDand can work in nancial systemsconsolidation or three main reasons:

fAn independent governancestructure was in place, withparticipation rom all componentdepartments, to increase buy-inand drive the process to a decision.

fClearly defned guiding princi-ples or reducing inrastructureootprint and costs.

fA common assessment rame-work to evaluate inrastructureconsistently, prioritize capabilities

by mission value, and assess costsavings achieved through closureand consolidation.

The ederal nancial managementcommunity should leverage thisapproach and implement an attribute-

based, objective Financial Realign-ment and Consolidation (FRAC)process. Such a ramework wouldquantitatively assess the nancialmanagement value (FMV) o systems,identiy the costs o realignment andclosure, and ultimately, reduce gov-ernment-wide nancial operationsand systems redundancy. A notionalFRAC approach is represented in Fig-ure 3 below and key aspects o thisapproach will be explored throughoutthe remaining sections o this article.

In subsequent sections, we overviewthe BRAC process with the intent o

drawing parallels and lessons learnedto be applied to the nancial manage-ment and systems environment. Thisreview will not delve into all o thenuances, complexities and criticismassociated with BRAC. Rather, we willidentiy key successes identied inliterature (e.g., BRAC reports) and thepotential application to nancial man-agement and system optimization. Itmust be noted that the ultimate solu-tion is about more than simply shitingand consolidating systems, rather this

process should address the core nan-cial management processing environ-ment and the subsequent impacts topeople, processes and technology.

ESTABLiSh A GOVERnAnCEPROCESS

The rst step is to establish anindependent governance process toshepherd the FRAC assessment andresulting recommendations. The keyto the governance process is to includerepresentatives rom across govern-ment in order to increase understand-

ing o nuanced mission requirementsand associated business processes,as well as increase buy-in or recom-mendations. The approach was suc-cessul or DoD, a microcosm o theederal government, made up o sev-eral departments and agencies, eachwith their own systems and undingsources and the autonomy to inde-pendently buy, build and operate. Byincorporating these stakeholders intothe process, DoD was able to increasethe ultimate success o BRAC. It isthe belie o the authors that this

orm o bottom-up governance, withits emphasis on collaboration andshared accountability or decisions,will prove to be more eective than atop-down approach driven indepen-dently by ederal oversight groups(i.e., GAO, OMB).

WHAT WORkED?

A key element o the BRACapproach included establishing theBRAC Commission (the Commis-sion) as an independent governance

authority with participation andbuy-in rom DoD stakeholder com-ponents. Make no mistake, the Com-mission was granted certain decisionauthorities which orced all stake-holders to the table. This act, rst andoremost, had the eect o over-rulinginconsistent or divergent actions byany key stakeholder. More impor-tantly, it drove a One DoD perspec-tive among the military services andshited the tenor o the conversationrom my bases to our bases.

The Commission was comprisedo 12 individuals with varied exper-tise, but with a common backgroundin complex policy issues and pro-

EstablishGoernanceStrctre

EstablishGidingPrinciples

DefneAssessmentFramework

Assessvale

Assess CostSaings &Conersion

EalateScenarios &Select Actions

Figure 2:COMPARiSOn BETWEEn DOD BASE inFRASTRUCTUREAnD FEDERAL FinAnCiAL SySTEM PORTFOLiO

Sitation Complication

Deense BaseInrastrctrePortolio

Excess capacity

Redundant inrastructure

Cost ineciencies

Varying mission priorities andrequirements

Economic implications andimpacts

Numerous department-level stakeholders withautonomous undingauthority

Political infuence

Change management

Continuit y o inrastructurecapability

Federal FinancialManagement andSystem Portolio

Disparate and distributedcapacity

Redundant inrastructure

Cost ineciencies

Varying mission priorities andrequirements

Duplicative capabilities

Numerous department-level stakeholders withautonomous undingauthority

Disruption o operations andaudit opinions

Change management

Continuit y o nancialoperations



cess improvement. The Commissionestablished a ormal charter thatdened guiding principles includingthe establishment o criteria used todetermine military value, and theestablishment o military value asthe driving criteria or the nominationo bases or closure or realignment.

Populating the Commission withmembers rom all DoD Services was

a key step in building goodwill withDoD stakeholders. However, it wasalso necessary to develop buy-in romthe impacted agencies. To do so, theCommission required each militaryservice to conduct a sel-assessment omilitary value and cost o realignmentand closure. Since the services them-selves were responsible or conductingthe assessments and providing recom-mendations, DoD was able to increase

buy-in towards a collective, cross-ser-vice portolio assessment o base inra-

structure. The Commission evaluatedthe recommendations, made trade-odecisions based on the DoD enterprise,and recommended realignments andclosures to Congress.

WHAT LESSONS CANWE APPLy TO FINANCIALSySTEMS?

A successul FRAC process shouldseek to emulate the core BRAC gover-nance processes above by implement-ing the ollowing:

idepedet Goverace:

fEstablish a panel with representa-tives rom various departmentswho have applicable subject mat-ter expertise;

fEmpower the panel with the cre-ation o a charter that supports/enorces governance processes;

fDevelop objective assessmentcriteria that determine FMV; and

fUtilize assessment criteria to driverecommendations or FRAC.

Cross-Agec Bu-:

fDevelop assessment criteria incollaboration with agencies;

fEstablish joint goals or FRAC;

fPromote the agency sel-assess-ment o FMV and recommenda-tions; and

fConsolidate recommendationsand conduct government-widetrade-o analysis.

The implementation o a governanceramework is the rst and perhaps, mostimportant step in the process and is crit-ical to the success o any consolidationeort, whether nancial or military innature. The governance structure willdrive the process long into the uture,engage stakeholders, establish the guid-ing principles and evaluation criteria,and ultimately, promote accountability.

ESTABLiSh A CLEAR SET OFGUiDinG PRinCiPLES

With the governance structure andprocess in place, the Commission wasable to ocus on the guiding principlesthat would shape the assessment pro-cess and ultimately, the recommenda-tions. A key to BRACs success was theemphasis on criteria that were designedto identiy and emphasize militaryvalue over simply cutting costs. Theobjective was more than inrastructureconsolidation; it was one o shiting andadjusting to the capabilities that would

be needed in the uture. This created aorward-looking perspective aligned tothe projected changes in orce structureand war-ghting capabilities.

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WHAT WORkED?

The Commission balanced orcestructure objectives with the les-sons learned rom previous BRACrounds to establish a set o guiding

principles5:Mltar Value (given prioritconsideration):

1. The current and uture missioncapabilities and the impact onoperational readiness o thetotal orce o DoD, including theimpact on joint war-ghting,training, and readiness.

2. The availability and conditiono land, acilities, and associatedairspace (including training areassuitable or maneuver by ground,naval, or air orces throughout adiversity o climate and terrainareas and staging areas) at bothexisting and potential receivinglocations.



3. The ability to accommodate con-tingency, mobilization, surge anduture total orce requirementsat both existing and potentialreceiving locations to supportoperations and training.

4. The cost o operations and themanpower implications.

Oter Cosderatos:5. The extent and timing o poten-

tial costs and savings, includingthe number o years, beginningwith the date o completion o theclosure or realignment, or thesavings to exceed the costs.

6. The economic impact on existingcommunities in the vicinity omilitary installations.

7. The ability o the inrastructureo both the existing and potential

receiving communities to supportorces, missions and personnel.

8. The environmental impact, includ-ing the impact o costs related topotential environmental restora-tion, waste management, andenvironmental compliance.

These principles were critical to thesuccess o BRAC and helped to avoidpolitical pitalls such as the percep-tion that DoD leadership was simplychasing cost targets or head count

reductions. Since the attributes ormilitary value were being driven bythe downsizing o the orce structureand the realignment to DoDs strate-gic priorities, the process had a natu-ral orcing unction. Specically, theCommission states, military valuewas o primary importance in itsdeliberations, the Commission alsoconsidered cost savings. No cost-sav-ings targets, foors or ceilings, wereestablished, and the Commission eltno obligation to reach any particulardollar gure cited in studies that haveappeared rom time to time.6

WHAT LESSONS CANWE APPLy TO FINANCIALMANAGEMENT AND SySTEMS?

Historically, nancial manage-ment consolidation eorts have beenunable to deliver actionable goals, or,at minimum, guiding principles orthe consolidation. By establishing aramework o goals/priorities, a FRAC

Commission can dene FMV anddrive consolidation in a way similarto BRAC. The key to BRAC was driv-ing consolidation in a way that did nothinder DoDs primary mission goals(e.g., operational readiness, surge). Ina FRAC process, it will be critical, asit was with BRAC, to emphasize thatthe assessment is based on inrastruc-ture and not jobs, business processesand not job unctions. In doing so, theFRAC process will be able to over-come cultural impediments to change.

Additionally, we must dene the

key drivers behind FMV. A FMVramework may take the ollowing intoaccount as actors to consider or theevaluation and prioritization o realign-ment and consolidation decisions:

fAuditability, Risk and Com-pliance: systems migration orrealignment o operations shouldensure minimal impact on agencyauditability and opinions on com-pliance with laws and regulations;and the enhancement o waste,raud, and abuse prevention.

fTechnology and Inrastructure:providers ability to retain earn-ings and oer protection againsttechnological obsolescence; recentinvestments in systems moderniza-tion and upgrades; and ability othe current technology and inra-structure to handle ever-evolvingrequirementstoday, in 5 years.

f Footprint/Scalability: expan-siveness o the solution (i.e., corenancials, asset management);

single-tenant versus multi-tenantapplication congurations; andscalability and capacity o thesolution to meet current anduture demands.

fService Oerings: ull serviceaccounting including transac-tion processing, versus platormservice, where the customers staprocess transactions on the hostednancial system; and ancillarynon-core services (procurement,travel, etc.).

The above are just a ew exam-

ples o the principles to consider orFRAC. FRAC discussions shouldaddress additional principles, as wellas the prioritization and weighting othe importance o each.

EVALUATE ThROUGh ACOMMOn ASSESSMEnTFRAMEWORk

A key strategy or the Commissionwas to develop an objective, value-

based ramework that would assessmilitary inrastructure and make rec-

ommendations or consolidation con-sistent with the departments orcestructure plan and selection criteria.

WHAT WORkED?

BRAC developed a common assess-ment ramework that was appliedacross DoD and tailored to accuratelyassess a diverse array o inrastruc-ture that varied in terms o mission,size and volume. A common assess-ment ramework drives objectivityin the decision-making process and

promotes consistent comparisonsamong departments. The assessmentramework consisted o two key com-ponents: the Military Value Assess-ment (MVA), and the Cost o BaseRealignment and Closure (COBRA).7

Mltar Value Assessmet (MVA):

The objective o the MVA assess-ment was two-old. First, it establisheda common taxonomy or describ-ing military installation capabilitiesand allowed or better comparisonacross the military branches. Second,

it provided a means to establish rela-tive rankings across the portolio oinstallations based on military valueattributes. The MVA was comprisedo a set o attributes grouped by capa-

bility and sub-capability areas; anexample used during the 2005 BRACis displayed in Figure 4.8 Each attri-

bute was assigned a weighting actoras a determination o higher or lowermilitary value.



Following the Commissions guid-ance, each service inventoried allinstallations, assigned each to inra-structure categories (e.g., medicalacilities, headquarters), and evalu-ated each installation against theMVA attributes (e.g. ammunitionstorage, airspace). The result wasan aggregate score or a militaryinstallation that created a relativeranking o importance against otherinstallations. The MVA criteria pro-vided the ability to cross-check the

existence/extent o capabilities orany specic attribute across the port-olio. The scoring and rankings wereused as key input towards recom-mendations or closure and realign-ment candidates.

Cost of Base Realgmet adClosure (COBRA):

Concurrent with the scoring andranking o bases through the MVAassessment, each base was evaluatedor costs savings, as well as or theeasibility and potential impact o

closure or realignment. The purposewas to estimate cost savings associ-ated with the realignment and clo-sure, and evaluate the potential orrelocation o activities or units romthe bases identied.

The cost-estimate model wasdesigned to capture costs and sav-ings through the application o ac-tors to assign dollar value to therecommendations provided to theCommission. Examples included:9

fOne-time costs/savings: construc-

tion, personnel retirements, reloca-tion, equipment transport costs, andenvironmental impact mitigation.

fRecurring costs/savings: housingallowances, changes in base sup-port (overhead and maintenance)costs, and mission-related costsrelated to relocation.

In order to estimate the total cost othe relocations, the Commission thenassessed the impacts o closures.

Key actors included:

fCost o realigning high-valuecapabilities to alternate bases;

fCommunity impact; and

fEnvironmental remediationimplications.

WHAT LESSONS CAN WE APPLyTO FINANCIAL SySTEMS?

The key to the BRAC assessmentramework was the use o objective

criteria to evaluate inrastructure,assign a military value, determinethe impact o consolidation, and ulti-mately, support management deci-sions. These same principles can beapplied in the nancial managementsystem arena by decomposing nan-cial management into sets o attributesand establishing relative FMV o thoseattributes with weighting actors.Evaluating each solution/instanceagainst those attributes will providea relative ranking o priority as input

to determining best candidates orrealignment/consolidation. Key con-siderations in applying MVA andCOBRA concepts to FRAC include:

fCommon structure o capabilities,sub-capabilities and attributes onancial management and systems;

fWeighting actors against attri-butes to determine FMV;

fObjective evaluation o nancialsystem attributes to derive an

aggregate score;fCommon structure o cost ele-ments or use in determiningpotential savings and/or addi-tional costs incurred regardingsystem migrations, upgrades,operations and maintenance; and

fObjective evaluation o cost sav-ings and conversion costs associ-ated with closure and realignmento nancial systems.

Figure 4:ExAMPLE MiLiTARy VALUE CRiTERiA FROM 2005 BRAC

Capabilities Sb-capabilities Attribtes

Training

Impact Areaand Ranges

Direct Fire Capability Indirect Fire Capability MOUT Capability

Maneuver / Air Space Heavy Maneuver Area Light Maneuver Area Airspace

Institutional Education General Instructional Facilities Applied Instructional Facilities

Environment / EncroachmentRestrictions

Air Quality Noise Contours

Soil Resiliency

Cost Efcient

Manpower Workorce Avail

Installation / Facilities

Joint Facilities Area Cost Factor C2 Tgt or Focus Facilities Unit Cost Factor

FtreOperations

Mission Expansion Capability Buildable Acres Brigade Capacity

Mission ExpansionFactors

Environ Elasticity Urban Sprawl Critical Inrastructure Proximity Water Quantity


9/9

Figure 5 above provides notionalexamples o FRAC attributes.

Additional discussions are neces-sary to dene the comprehensive listo FMV and cost actors. Discussionsshould be collaborative and includekey stakeholders that may be impactedduring the process. The scope o thenancial management systems envi-ronments is expansive and impacts

numerous stakeholder groups rangingrom budget to acquisition to account-ing to inormation technology. Addi-tionally, a determination must be madewith regard to weighting and priori-tizing these actors. Ultimately, all ac-tors cannot be created equal and sometrade-os must be made. However, ithese questions are asked and appro-priately vetted, the government willhave a strong tool or driving nancialsystem consolidation and realignment.

COnCLUSiOnThroughout this article, we havepresented a conceptual approach thatmay be applied to drive real progress inrealigning and consolidating the port-olio o ederal nancial managementsystems. The success demonstratedwith the DoD BRAC process serves asa proo point that cross-departmentalmechanisms can be designed that pro-vide a transparent means to evaluateand rationalize a portolio. The combi-nation o an independent governancestructure, a clear set o guiding prin-ciples or dening value, and the use oan objective assessment ramework hasstood the test o time, demonstratingsuccess on ve separate occasions overthe past three decades.

Although military and nancialmanagement inrastructure mayvary in terms o size, complexity andmission, both share common distinc-tions: the need to reduce the oot-print, the imperative to cut costs, anda community o stakeholders thatcross organizational boundaries with

Figure 5:nOTiOnAL FRAC ATTRiBUTES

NotionalAttribtes

FMv Factors Cost Factors Impacts/ Challenges Notional Recommendations

Auditabilit y, Risk andCompliance

Technology and Inrastructure(e.g., obsolescence)

Service Oerings (e.g., ullservice, platorm service)

Footprint / Scalability (e.g., #o users/agencies)

Licensing ees

Sot ware modules

Maintenance

Hardware costs

Training

Data conversion

Training administration Audit services and testing

Impact to agencyaudits

Sequestration

Cost to develop/implement

Cost to migrate

Change management Training

Consolidate by agency

Consolidate cross-agency

Consolidate by businessevent (e.g., invoicing)

Consolidate processes

(e.g., procurement)

dierent sets o priorities and objec-tives. These commonalities suggestthere is great promise in the appli-cation o a value-based assessmentramework to acilitate an objectiveevaluation, particularly when it alsoserves to mitigate the eect o politi-cal or biased infuence.

Many challenges ace the ederalnancial management community.

The cost o duplicative nancial sys-tems is only one o them. The needto develop and deploy a BRAC-likeapproach to nancial managementsystems consolidation goes beyondthe most immediate need to drivecost-savings during times o tight

budgets. The greater issue is in creat-ing the means to evaluate and designactions that enhance the collectivevalue provided by a reduced portolioo ederal nancial management sys-tems, much like DoD accomplishedthrough the BRAC process.

End Notes1. The Economic Impact o the Presidents

2013 Budget Report, April 20, 20122. 2012 Annual Report, Opportunities to

Reduce Duplication, Overlap and Frag-mentation, Achieve Savings, and EnhanceRevenue, GAO-12-342SP, Feb 28, 2012

3. Public Law 100-526, 101-510, and 107-1074. 2005 Deense Base Closure and Realign-

ment Commission Report, September 20055. 2005 Deense Base Closure and Realign-

ment Commission Report, September 2005

6. Base Realignments and Closures, Reporto the Deense Secretarys Commission,December 1988

7. The MVA and COBRA assessmentsare two elements o a very extensive BRACprocess, which is thoroughly documentedin the 2005 BRAC Commission Report. Thisarticle highlights these two techniques as keycomponents o a potential nancial systemsconsolidation approach and is not meant toimply these are the only components o theentire BRAC process.

8. 2005 Deense Base Closure and Realign-ment Commission Report, September 2005

9. Base Realignments and Closures, Re-port o the Deense Secretarys Commission,December 1988

Carlos A. Otal, CPA, a member o AGAs Washington, DCChapter, is a Partner in Grant Thornton LLPs Global PublicSector practice. He has 20 years o experience in the assess-ment and implementation o enterprise systems in bothpublic and private sectors. Through AGAs CPAG, Otal hasbeen key in the development and execution o the annualAGA Federal Financial Systems Summit, and a principalcontributor to AGAs Research Report No. 31: Government-wide Financial Reporting.

Ward Melhuish, a member o AGAs Washington, DC Chapter,is a Principal in Grant Thornton LLPs Global Public Sectorpractice. He has more than 25 years o government andindustry exper ience consulting in managerial costing, processimprovement, benchmarking and strategy services. With priorexperience as an active Duty Naval Ofcer, Melhuish hasexperience with DoD cost management, process improvementand capital budget management.

Additional contributor: Timothy Love, MPA, a member o AGAs Washington,DC Chapter, is a Manager in Grant Thornton LLPs Global Public Sector Practice.

Documents

A Model for Realignment and Consolidation: Applying BRAC Principles to the Federal Financial Management and System Environment