What GAO Found
The Justice Management Division (JMD), the component responsible for managing the working capital fund, effectively tracks fund functions to ensure adherence to applicable fiscal laws and sound management practices. For example, JMD has well-established policies and procedures for tracking and monitoring the four working capital fund functions so that the fund adheres to authorized purposes. Further, JMD structures its reimbursable agreements with customers to facilitate adherence to the Economy Actthe statutory authority underlying most of JMDs customer orders. JMD also clearly delineates roles and responsibilities, which allows customers to know who to contact with questions and clearly assigns responsibility for obligating and expending funds. Justice also ensures the funds self-sufficiency by recovering total costs for the provided services. These actions are consistent with two of the four key operating principles for working capital funds.Customers noted positive benefits from Justices shared services but seek more information on rate structures and want assurances that fund costs are equitably distributed. For example, customers said they valued the breadth of services offered as well as the experience of fund staff but wanted to better understand the basis for shared services rates and more opportunities to discuss billing concerns and service changes with JMD. Officials expressed surprise at these concerns. They noted that informal information sharing on rates and rate structures happens regularly, but explained that each staff director has his/her own way of communicating with customers and acknowledged that some may be better at providing customer support than others.
JMD does not systematically measure important aspects of shared service provision and working capital fund management. For example, JMD tracks workload measures such as the number of transactions processed, but does not assess customer satisfaction with shared services. It also does not have measures to assess how effectively it manages the fund, such as whether managers are responsive to concerns about shared service rates or billing issuesareas with which customers have expressed concern. Absent a formal mechanism for customers to provide timely and regular feedback, JMD cannot sufficiently assess whether customer needs are met or have changed. JMD also has not assessed its shared services rates to know whether they provide a good value to customers. If available, specific working capital fund-level performance information would allow JMD to regularly compare actual performance with planned or expected performance. Further, a corresponding management review process could help JMD achieve the efficiencies that working capital funds were designed to produce, potentially freeing up resources that could be realigned for other departmental initiatives. Lastly, performance measures aligned with strategic goals can be used to evaluate whether and how working capital fund activities contribute to departmentwide goals and crosscutting initiatives.
Justice has processes to ensure that excess unobligated balances are used in accordance with legal authorities. It also has an established process to make well-informed decisions on how to spend available funds. However, JMD budget officials told us that these balances were unavailable for departmentwide priorities in recent years because they have been used to meet rescissions.
Why GAO Did This Study
The Department of Justices (Justice) working capital fund is intended to provide increased efficiencies in how the department funds and offers shared servicessuch as payroll, telecommunications, financial services, mail, and publicationsvalued at over $1 billion annually. Ensuring that the working capital fund is managed as efficiently as possible could allow Justice to use saved resources for other departmental priorities. GAO was asked to determine how Justice (1) manages its working capital fund to promote compliance with applicable fiscal laws and key operating principles, (2) communicates shared services rates with customers, (3) measures performance to evaluate whether fund activities are contributing to agency goals, and (4) ensures that its excess unobligated balances are used in accordance with legal authorities and managed so that Justice can make well-informed funding decisions. GAO reviewed statutory authorities, analyzed Justice policies, interviewed budget and finance officials, and conducted focus groups with some shared services customers.
GAO is making three recommendations to improve the management of the working capital fund, including providing opportunities for two-way substantive communications with customers and developing performance measures for the fund. Justice generally agreed with our findings and recommendations and noted that it will continue to explore ways to address the issues we identified.
Recommendations for Executive Action
|Department of Justice||To improve the management of the Justice working capital fund, the Attorney General should direct the Assistant Attorney General for Administration (AAG/A) to improve opportunities for two-way substantive communication with shared services customers. This could include developing a means to discuss customer concerns about working capital fund rates and services; organizing breakout sessions on specific lines of business, to be attended by appropriate customer program and finance staff; restructuring the annual CAB meetings to allow further opportunities for two-way communication; conducting a periodic survey or listening session with customers on such topics as their level of satisfaction or potential changes to service needs; or a combination of these.||
Closed - Implemented
|Department of Justice||To improve the management of the Justice working capital fund, the Attorney General should direct the AAG/A to help ensure that information on the basis of rates for each shared services and sufficiently detailed billing information reaches the appropriate customer staff, especially those in the finance and program offices. This could include posting relevant portions of the operating plan with information on the basis of rate structures on Justice's intranet, requiring both a program office and finance point of contact to be provided in each reimbursable agreement, or organizing periodic dedicated sessions for both program staff and finance customer staff to discuss issues relevant to them.||
Closed - Implemented
|Department of Justice||To improve the management of the Justice working capital fund, the Attorney General should direct the AAG/A to develop performance measures to monitor whether all shared services are provided in an efficient and effective manner. These measures should support goals that align with Justice priorities and, as the departmental needs change over time, provide JMD additional assurance that the level and types of working capital fund services provided support current departmental goals.||
Closed - Implemented