Congressional Justifications for 1998 Budget Estimates

Budget Activity 10: Chief Financial Officer
Salaries and Expenses

Scope of Activity

The mission of the Office of the Chief Financial Officer (CFO) is to lead the Department's Headquarters and Field Office officials toward the understanding and practice of sound financial management in program development and operations, and in the stewardship of public resources. The CFO advises the Secretary on all aspects of financial management. The CFO ensures that the Department establishes and meets financial management goals and objectives, and that the Department is in compliance with financial management legislation and directives. The scope of activity cross-cuts the entire Department. The CFO establishes policies and standards for development, maintenance, operation and evaluation of the Department's financial management systems, including: budget and accounting systems, internal control systems, financial reporting systems, asset and credit management systems, and systems to audit compliance with financial management and related requirements. The CFO also provides accounting services for all administrative activities of the Department and for all operating programs, except for those administered by the Government National Mortgage Association and FHA activities including mortgage insurance accounting.

Workload

The workload of the Office of the Chief Financial Officer is essentially defined by the following key objectives:

• establish and maintain integrated financial management systems;
• improve Departmental management of asset and credit management functions;
• develop a strong internal control program and address material weaknesses in the Department;
• produce audited consolidated financial statements; and
• develop uniform financial management policies and procedures.

Workload elements for accounting operations under the CFO Office of Accounting and in the Regions are quantified in the following table.

Workload Indicator	1996	1997	1998
Invoices	80,000	40,000 b/	...
Reservations/Obligations	27,000	27,000	24,000
Disbursement documents processed	9,000	9,000	9,000 b/
Collection documents processed	77,000	77,000	37,000 b/
Excess Rental Income Collections	108,000	108,000	54,000 b/
Debt Collections	400	400	200 b/
Automated Clearing House Reports	14,000	14,000	7,000 b/
Reconciliations processed	6,744	6,744	3,400 b/
Cash Reconciliation analyses	780	790	400 b/
Note histories processed	200	...	...
Funding documents processed	4,691	4,691	2,300 b/
Receivables processed	5,131	5,141	2,600 b/
Cash documents processed	26,205	28,055	14,000 b/
Residual receipts reviewed/billed a/	1,500	...	...
Internal reports processed	3,512	3,605	3,700
Financial reports (Treasury) prepared	3,400	3,400	3,400
Field: Accounting documents processed	1,021,270	940,000	901,000 c/
Prompt Pay documents processed	6,039	6,000	6,000
Suspense items processed	530	500	500

a/	In fiscal year 1996, Housing field staff will commence performing these reviews.
b/	Reduction due to the rollout of Headquarters payment of invoices to the Field. Headquarters reduction added to Field documents processed.
c/	Field numbers subject to transfer of Headquarters functions to Field. Consolidation of Field accounting discussions and HUDCAPS implementation.

Workload elements for the Audit Resolution and Management Control operations in the Field are quantified in the following table:

	1996	1997	1998
Recommendations closed	1,054	1,100	1,100
Material Weaknesses completed	6	...	...
Material Weaknesses verified as corrected	0	6	4

Travel

The table below identifies travel requirements unique to this activity

	Actual 1996	Budget Estimate 1997	Estimate 1997	Current Estimate 1998	Increase + Decrease - 1998 vs 1997
	(Dollars in Thousands)
Travel:    Headquarters	$60	$87	$60	$60	...
Field	37	46	30	30	...
Total	97	133	90	90	...

Travel funding for this activity is required to fully carry out CFO responsibilities for improving Departmental financial management. CFO travel will focus attention on program delivery operations at the Field Office level and will provide oversight and review for: asset and credit management; debt collection; resolution of audit findings and internal control weaknesses; and test and establish internal controls.

A major initiative of the Office of the CFO is to establish financial management skills and expertise in the field through the Offices of the Field Comptroller. The approved reorganization of the Office of the CFO on May 14, 1995, allows for the Deputy CFO for Accounting to provide policy direction, review and coordination of the fiscal and accounting responsibilities of the Department and, with the assistance of the ten Field Accounting Divisions, provide the accounting services for all administrative activities of the Department and for all operating programs, except for those administered by Government National Mortgage Association and FHA activities including mortgage insurance accounting. The CFO will maintain strong working relationships with field financial management executives by sponsoring semi-annual financial management conferences for the Field Comptrollers and the Field Accounting Directors. The CFO will also require expending travel funds due to the planned downsizing and restructuring of its Field component.

Contracts

	Actual 1996	Budget Estimate 1997	Estimate 1997	Current Estimate 1998	Increase + Decrease - 1998 vs 1997
	(Dollars in Thousands)
Management Studies	$162	$340	$50	$150	$100
Technical Services	201	510	200	310	110
Total	363	850	250	460	210

Management Studies. The continued development and implementation of an exemplary system of program internal controls, material weakness verification reviews, integration of financial management information systems, and development of handbooks and directives on financial policy including the use of audited consolidated financial statements, reporting on cash and credit management, and credit reform guidelines will be accomplished through contract services.

Technical Services. These funds are for specialized technical support within the CFO. For example, Technical Services funds will be used to support the following:

Line of Credit Control System (LOCCS), which is a computerized cash management and disbursement system developed for the Department to assist the CFO in planning, accounting, and evaluating HUD disbursement within specific program areas;

National Science Foundation (NSF), in which the Department has a Memorandum of Agreement (MOA) authorizing fiscal year payments for FinanceNet Services that support the independent public Internet network established by the Vice President's National Performance Review and operated by the NSF as the electronic document clearing house of the Joint Financial Management Improvement Program;

Department of Justice (DOJ), in which the Department has a Reimbursable Agreement (RA), provides the CFO with data preparation and microfilm services for accounting records on several Departmental programs;

Professional Software Consortium, Inc., provides the CFO with an annual maintenance agreement and software upgrade(s) for the Civilian PCS Program for the Department's National Relocation Center; and

PAJ Business Staffing, provides temporary clerical support for the CFO's Deputy Chief Financial Officer for Finance where there is a vacant secretarial position.