Financial Management Shared Services: Progress and Identified Challenges

What GAO Found

The Department of the Treasury’s Financial Management Quality Service Management Office, the Office of Management and Budget (OMB), and the General Services Administration (GSA) have taken steps to implement financial management shared services across the government. Shared services can help improve efficiency, transparency, and stewardship of federal funds.

Consolidating financial management shared services can help reduce duplicative efforts and costs across government for common business activities. As part of these supporting efforts, Treasury recently established a financial management marketplace where customer agencies, federal providers, and commercial providers can buy and sell shared services and solutions.

Treasury’s Financial Management Quality Service Management Office’s Approach to Managing the Financial Management Marketplace

The marketplace has already achieved progress, such as the approximate amount of services and solutions procured by customer agencies growing from $3 million in fiscal year 2023 to more than $183 million in fiscal year 2024. However, the federal government has experienced implementation challenges. Some common challenges Treasury, customer agencies, and providers have reported experiencing involve

• raising awareness of the benefits and requirements to use the marketplace;
• addressing changing technology and new requirements during the modernization process;
• maintaining clear roles and responsibilities when coordinating across the federal government; and
• securing adequate funding for multiyear, large-scale projects, such as modernizing core financial systems.

Officials from selected foreign governments that GAO interviewed also identified multiple lessons learned to consider when implementing financial management shared services. Some of these lessons learned include establishing a strong governance structure and method to monitor shared services performance, as well as ensuring that shared services contracts allow for flexibility in anticipation of changes throughout implementation. OMB, GSA, and Treasury reported that they were not aware of any statutes or agency policies that would prevent the adoption of financial management shared services across the federal government or that would inhibit the government from executing its approach to financial management shared services.

To continue financial management shared services implementation efforts, the President issued an executive order in March 2025 that aims to increase the prominence of the marketplace and implementation of financial management shared services. Specifically, the executive order directs all 24 Chief Financial Officers Act (CFO Act) agencies to consolidate their core financial systems and use standard financial management solutions obtained through the marketplace. In addition, all non-CFO Act agencies are to consolidate financial management services under a single provider approved by Treasury. The OMB Director is to provide guidance within 180 days of the executive order. The challenges and lessons learned identified in this report offer important considerations as OMB develops guidance under the March 2025 executive order for the latest initiative. GAO will continue to monitor these efforts.

Why GAO Did This Study

Over the past 20 years, the federal government has launched multiple initiatives to promote agencies’ use of financial management shared services. However, while shared services offer potential for optimizing government resources, GAO has previously reported that past efforts to migrate to shared services have not consistently increased cost savings, efficiencies, or customer satisfaction.

The Joint Explanatory Statement accompanying the Consolidated Appropriations Act, 2023 includes a provision for GAO to review the adoption of shared technology platforms and services. This report is the first in a series of reports addressing shared services and solutions and provides information on the status of the federal government’s plans to implement financial management shared services.

To perform this work, GAO interviewed GSA, Treasury, and OMB staff. GAO also conducted a literature search and reviewed relevant publications to identify progress and challenges in implementing financial management shared services and foreign governments that have implemented shared services. GAO also interviewed officials from foreign governments and reviewed their published reports to identify their lessons learned on shared services.

For more information, contact Paula M. Rascona at rasconap@gao.gov.