Top Financial Performance: Government Experts Speak Out

A greater focus on fiscal accountability will require government agencies to improve their knowledge of their real property inventory as it applies to operations, missions, and accounting and information systems. That was the opinion of a panel of experts speaking at a May 3 executive seminar titled “Top Financial Performance: Real Property in the Era of Full Accountability”.

The seminar, held at the City Club on Franklin Square in Washington, DC, is part of an ongoing educational series sponsored in part by VISTA Technology Services.

According to Joe Kull, director of financial management services in the federal practice of PricewaterhouseCoopers a cultural change in government began with the CFO Act, requiring better accounting of assets. Office of Management and Budget Circular A-123 (OMB A-123) has brought even greater scrutiny to the process.

The difficulty in establishing best practices in accounting for such assets, Kull said, was a lack of concrete definitions and benchmarking standards. While everyone talks about ‘rightsizing’ the portfolio, it’s unclear what the definition of “right size” is. What’s more, because agencies share and loan assets, it’s difficult to use private sector experience as a point of comparison.

Nonetheless, budget forecasting requires a focus on real property inventory, according to Lora Muchmore, acting director of business enterprise integration in the Office of the Deputy Under Secretary of Defense. The DoD aligns asset management with life cycle and financial management, for a holistic view of the business processes of DoD. This analysis involves not only technologists and operations people, but financial professionals as well, working together.

At the Department of Health and Human Services (HHS), helping to comply with legislative and regulatory requirements, such as President’s Management Agenda (PMA) objectives, is part of each employee’s performance plan. William Stamper, Deputy Assistant Secretary for Facilities Management and Policy at HHS is looking at ways to reduce operations costs and establish standards for space. Moving forward, HHS is looking to establish operations and maintenance best practices and to develop better asset management competencies, to better live up to the requirements of Executive Order 13327 on Federal Real Property Asset Management (EO 13327).

Results from EO 13327 on a governmentwide level may be known by 2008, according to Stan Kaczmarczyk, acting deputy administrator in the General Services Administration’s Office of Governmentwide Policy. In the interim, he said, real property managers need to refine their organizational and financial skills to ensure better accountability.

Departmental compliance with financial and asset management initiatives must overcome some inherent stumbling blocks, according to VISTA President and CEO David Baxa. Particularly in developing Asset Management Plans (AMPs) as required by EO 13327, decentralized decision-making has diluted responsibility and authority. Additionally, many organizations have simply repackaged their current business practices as AMPs. An AMP requires a paradigm shift in thinking. Agencies also suffer from insufficient validated data on their current inventory of real property assets.

These changes must be made to ensure better financial performance. All the panelists agreed that the country is in a budget crisis. Automating processes and planning for long-term cultural changes, such as increases in workforce telecommuting, can transform real property from a must-pay bill to a bottom-line benefit.

For information on upcoming VISTA educational seminars, contact Kimberly.Price@vistatsi.com

For additional media coverage on this seminar, see Federal Computer Week’s article “Property of the U.S. government” at http://www.fcw.com/article94287-05-08-06-Print