Intragovernmental Revolving Funds: Commerce Departmental and Census Working Capital Funds Should Better Reflect Key Operating Principles
Agencies can improve their efficiency through the use of shared services, which are often financed through intragovernmental revolving funds (IRF). GAO was asked to (1) identify key operating principles the Commerce Departmental and Census Bureau Working Capital Funds (WCF), which are one type of IRF, should follow to ensure appropriate tracking and use of federal funds and (2) evaluate how departmental and Census policies and procedures for managing these WCFs reflect these principles. GAO identified four key operating principles based on a review of governmentwide guidance on business principles, internal controls, managerial cost accounting, and performance management. GAO also discussed the reasonableness of the principles with staff of the two WCFs and the Office of Management and Budget; these staff generally found the principles to be reasonable. GAO reviewed WCF authorizing legislation and statutory authorities, analyzed agency policies and data, and interviewed agency officials.
Recommendations for Executive Action
|Department of Commerce||To improve the management of the Commerce Departmental Working Capital Fund, the Secretary of Commerce should update the Commerce Departmental WCF handbook to include a description of the Commerce CFO Council and its roles and responsibilities.||
On January 19, 2012, a Department of Commerce official provided GAO with a written letter from the Commerce Secretary stating the actions taken in response to our recommendations. The letter states that Departmental Management has updated the Working Capital Fund handbook to include a description of the Commerce CFO Council and its roles and responsibilities. The team has requested and is awaiting an updated copy of the handbook. On February 26, 2012, they provided the Department of Commerce's 2012 Working Capital Fund handbook. The team confirmed that a new appendix has been added to the handbook describing the roles and responsibilities of the Commerce CFO Council.
|Department of Commerce||To improve the management of the Commerce Departmental Working Capital Fund, and to meet its responsibilities in ensuring the proper use of federal funds and to help guard against the use of canceled appropriations, the Secretary of Commerce should revise its financial systems to electronically record and monitor the period of availability of appropriations advanced to Commerce and its bureaus from client agencies.||
In February 2016, Commerce Department officials confirmed that as part of a department-wide initiative to implement a new financial management and business system (Business Application Solutions or BAS), recording the period of availability of funds advanced from the bureaus is included among the BAS requirements. These requirements include a specific data field to capture the beginning and end period of availability, which Commerce officials said applies to all appropriations. Commerce officials confirmed that the planning phase for BAS continues as they work collaboratively with the Office of Management and Budget as well as the Office of Financial Innovation and Transformation within the Department of the Treasury to find a viable Federal Shared Service Provider solution that will meet Commerce's requirements.
|Department of Commerce||To improve the management of the Commerce Departmental Working Capital Fund, the Secretary of Commerce should establish performance measures to assess performance of WCF operations, such as billing error rates, and determine what additional measures would be helpful to improve WCF management.||
The Commerce Department identified performance measures for fiscal years 2014 and 2015 for several of the services provided and supported through its Working Capital Fund (WCF). These measures are outlined in Commerce
|Department of Commerce||To improve the management of the Commerce Departmental Working Capital Fund, the Secretary of Commerce should coordinate with the Census Bureau to examine the management and administrative (M&A) services provided through both WCFs to determine what services might be consolidated.||
The Department of Commerce established a Working Capital Fund (WCF) Working Group in fiscal year 2014 to discuss, communicate, and share best practices. Participants included the budget directors and appropriate management and staff from Departmental Management, the Census Bureau, and the National Institute of Standards and Technology. Each entity presented an overview of its WCF to the full group in October 2014 through December 2014, including information about governance, funding sources, services provided, billing, and management challenges. Commerce provided us with copies of each presentation. The Working Group reconvened in January 2015 and February 2015 to recap the three WCF presentations and discussed similarities and differences. The group determined there are similar but not overlapping characteristics across the three WCFs such as, institutional support and shared services. The group agreed that best practices should continue to be communicated and shared, however, it was agreed that the fundamental mission of each WCF group was different, thereby involving certain services unique to each fund. For example, Commerce said the Departmental WCF's purpose is to provide centralized shared services to its bureaus, including the Census Bureau. All 80 WCF projects were established with the purpose of sharing centralized services with Census as well as the other bureaus. Some WCF projects are already specific to Census such as those provided through the Office of General Counsel and the Office of Security. In comparison, the Census Bureau provides bureau-specific centralized services that widely benefit all of its programs but cannot be accurately or efficiently charged to one specific program or project as is done with the Departmental WCF. The Census WCF also provides the management, technology, and logistical infrastructure at regional offices and a central processing facility that support all of the bureau's surveys, censuses, and programs. In addition, the Census WCF manages nearly $300 million in reimbursable agreements through its WCF to provide specialized survey and statistical services for other agencies and non-federal government entities as well as to fairly distribute common costs to these reimbursable projects. The WCF Working Group agreed that by collaborating and learning more about each bureau's WCF, they are able to strengthen the management of each specific WCF (documentation, handbooks, reporting, common challenges, benchmarking and replicating success stories). Commerce confirmed that the Working Group agreed to meet monthly over the next 9 months of fiscal year 2015 to discuss various best practice topics including: carryover challenges, apportionments, reporting, financial systems, governance, annual handbooks, rate setting, and performance metrics.
|Department of Commerce||To improve the management of the Census Bureau Working Capital Fund, the Secretary of Commerce should require the Under Secretary for Economic Affairs as well as the Census Director to develop guidance that clarifies and consolidates existing WCF policies to include: a. roles and responsibilities of key personnel responsible for WCF management, and b. a process to coordinate information managed by disparate divisions to provide an overarching view of the WCF and ensure the appropriate tracking of funds.||
The Census Bureau took three steps to implement this recommendation. First, on 10/12/12 the Bureau provided us with its Working Capital Fund (WCF) "As-Is Workflow" document (dated June 2012), which included a section defining the roles and responsibilities of major stakeholder groups involved with the Census Bureau's Working Capital Fund (WCF): WCF external stakeholders, WCF management, WCF services providers, and WCF customers. In addition, the Bureau included an appendix to this document with more detailed information about the members of each of the 4 stakeholder groups, their roles, responsibilities, and points of contact. Second, the Census Bureau included this same information in its FY2013 Service Rate Bulletin (SRB). Third, in July 2012, the Bureau developed and issued a final WCF Communications Strategy and Policy, which provides the communications framework and guidelines for the WCF. The document provides an approach and recommendations to help increase transparency surrounding WCF operations and activities, including the rate-setting process. Included in the strategy document is a "communications matrix," detailed communications process steps, guiding principles, and identification of the roles and responsibilities of key individuals involved in the development and execution of communications to support the Bureau's WCF.
|Department of Commerce||To improve the management of the Census Bureau Working Capital Fund, the Secretary of Commerce should require the Under Secretary for Economic Affairs as well as the Census Director to include a more detailed explanation in WCF guidance on the rate-setting process for all components of the fund, such as an explanation of how rates are determined and costs distributed, and establish a formal process similar to the Departmental WCF's process to communicate with customers.||
On 4/30/15, the Census Bureau finalized its Working Capital Fund (WCF) Handbook, which includes specific sections on WCF activities and services, operations and billing, and governance and oversight. Included as an appendix to the handbook is the Bureau's Service Rate Bulletin which provides further details about the rate-setting process and how costs are distributed. In addition, the Bureau established a formal governance structure for the WCF by creating an Executive Oversight Committee (EOC) to support the Chief Financial Officer with oversight of WCF activities. The governance activities include: (1) facilitating key decision-making on WCF topics, (2) soliciting feedback from internal customers on a regular basis, and (3) providing input and making recommendations on services provided by the WCF. Also included in this governance structure is a Customer Advisory Board comprised of advocates for WCF customers. As part of the development of its WCF handbook, the Bureau created and issued two additional strategy documents: (1) WCF Communications Strategy & Policy, which includes a "communications matrix," detailed communications process steps, guiding principles, and identification of the roles and responsibilities of key individuals involved in the development and execution of communications to support the Bureau's WCF; and (2) WCF "As-Is Workflow" document, which includes specific sections (a) describing more detailed information about how the various WCF rates are set, (b) providing an overview of WCF reporting to external stakeholders and customers, (c) providing an overview of internal reporting and monitoring for the WCF, and (d) identifying the various WCF communication forums for WCF customers (both internal and external).
|Department of Commerce||To improve the management of the Census Bureau Working Capital Fund, the Secretary of Commerce should require the Under Secretary for Economic Affairs as well as the Census Director to establish performance measures to assess performance of WCF operations and determine what would be helpful to improve WCF management.||
In April 2015, the Census Bureau provided us with it's updated version of the WCF performance metrics to be reported by CFO units in fiscal year 2015 for various elements of the WCF including financial management, administrative services, and acquisitions. The document includes a description of each metric and individual templates for each metric that will be used to track progress. For example, one metric will help the Bureau track its success meeting Department of Commerce and internal financial performance goals for timely processing of travel and vendor payments. This metric will assist with managing financial activities to better analyze the results, identify reasons for late payments, address issues, and monitor progress towards performance improvement. The Bureau also established metrics for various administrative services that, for example, will help identify any potential delays with onboarding new employees and contractors that might negatively affect program missions. As part of the development of these WCF performance metrics, Census budget officials presented an overview of the Bureau?s WCF at the Commerce Department's Working Capital Fund (WCF) Working Group meeting in November 2014, which included information about performance measures for budget and finance activities and administrative services, among others. For example, metrics included the number of WCF rates recovering more/less than full cost and number of projects closed with differences between estimated cost and actuals within a threshold.