managers—are you looking for more—adequate financial information needed in managing operations...

Managers—Are You Looking for More

Meaninyful Financial Reports?

JOINT FINANCIAL MANAGEMENT IMPROVEMENT PROGRAM

FOREWORD

Today's Federal managers need informative financialreports that are timely, complete and accurate in order tomaintain a high degree of accountability, to assure moreefficient and effective operations, and to minimize waste andmismanagement. The Joint Financial Management ImprovementProgram undertook a study to identify agency reports thatserved these objectives.

This booklet presents, in the form of case studies,examples of financial reports that we believe were usefuland beneficial to agency managers. In so doing, we do notinfer that these are the only good reports existing in theFederal Government. In the interest of time we concentrated

on the examples fchat were brought to our attention during thebrief study. We believe the reports cited in this bookletwill be helpful to Government managers—both financial andnonfinancial--in assessing the kind of financial informationthey would like to have. Certainly, the reports are notlikely to be transferable exactly as they are presented, butfchey contain invaluable lessons learned in the principles,concepts and techniques of good financial reporting. We hopethat this document is an important addition to otheravailable literature on Government financial management.

Readers of this publication are invited to comment orprovide suggestions on its usefulness. In addition, if youare aware of other meaningful and useful financial reportingsystems that could be beneficial to other financial managers,please contact the Joint Financial Management ImprovementProgram. Comments and requests for copies of this publica-tion should be sent to the Joint Financial ManagementImprovement Program.

Susumu UyedaExecutive DirectorAugust 1980

1 -

ACKNOWLEDGEMENT

We gratefully extend our appreciation to the followingindividuals for their support and efforts in making thispublication possible:

Federal Agencies

Daniel J. CirminielloDefense Personnel Support Center

Defense Logistics Agency

Dick FerraroU.S. Forest Service

Mike KaplanEnvironmental Protection Agency

Larry E. KruhmOffice of Justice Assistance,

Research and Statistics

Robert SampsonFederal Reserve Board

James R. Turner

U.S. Forest Service

Joint Financial Management Improvement Program

Nancy A. HelmerSandra McDonaldJoseph Neiberger

Alan Rebello

11 -

CONTENTS

Paqe

FOREWORD i

ACKNOWLEDGEMENT ii

CHAPTER

1 INTRODUCTION. ................ 1

2 THE PROGRAM ACCOUNTING AND MANAGEMENTATTAINMENT REPORTING SYSTEM OF THE U.S.FOREST SERVICE. ............... 4

3 THE PLANNING AND CONTROL SYSTEM OF THEFEDERAL RESERVE BANKS ........... .13

4 COMMERCIAL TYPE FINANCIAL STATEMENTSAND JOB ORDER ACCOUNTING SYSTEM ATTHE CLOTHING FACTORY, DEFENSE PERSONNELSUPPORT CENTER. .............. .20

5 THE SOFTWARE PACKAGE FOR UNIQUE REPORTSOF THE ENVIRONMENTAL PROTECTION AGENCY. ... 32

6 THE "CRADLE-TO-GRAVE" GRANT TRACKINGSYSTEM OF THE OFFICE OF JUSTICEASSISTANCE, RESEARCH AND STATISTICS .... .39

CHAPTER 1

INTRODUCTION

Government managers are being held more and moreaccountable for agency accomplishments and resourceutilization. With public austerity pressures, such asProposition 13 and proposals for a balanced Federal budget,Government managers are challenged to use scarce resources

wisely in providing essential public services efficiently andeffectively. Managers are finding that they depend on moreuseful, complete, accurate and timely information to managetheir operations. This booklet, therefore, was developedwith the intention of illustrating examples of good financialmanagement reports so that their concepts and techniques canbe considered and used elsewhere.

Agency financial management responsibilities can beidentified to legislation authorizing its mission and otherlegislation such as the Accounting and Auditing Act of 1950.The Accounting and Auditing Act requires the head of eachexecutive agency to establish and maintain systems ofaccounting and internal control designed to provide for:

—Full disclosure of the results of financialoperations.

—Adequate financial information needed in managingoperations and formulating and executing thebudget.

--Effective control over revenues, funds, property and

other assets.

--Reliable financial information for use by thelegislative and executive branches of Government.

--Suitable financial information for central reports onoverall results of Government operations.

The Administration has continuously reemphasized toheads of departments and agencies the importance of assessingthe effectiveness of their programs and the efficiency withwhich they are conducted. 0MB Circular No. A-117, forexample, provides guidance on management improvement issuesand seeks agencies' improvements on a continuing basis sothat they will reflect the most progressive practices of bothpublic and business management.

The General Accounting Office recently published a pam-phlet titled, "Managers, Your Accounting System Can Do A LotFor You (Accountants, You Can Do A Lot For Your Managers)."

It presents discussions and case studies on how managers canbetter use their accounting systems and the information theyproduce.

According to the pamphlet, the manager's job basicallyis to achieve goals at the least practicable cost, to makethe best possible use of the resources, and to stay withinspending and other limitations. To do this job, managersneed timely, complete and accurate information on:

--Legal limits and resources available.

—Obligations and costs incurred and their relationshipto budgeted amounts.

—Work goals achieved and their cost.

--The degree to which work goals are met.

--Opportunities to achieve goals at a lower cost.

These basic kinds of information must be tailored to theneeds of managers at different levels in the organizationalhierarchy:

—Top agency executives need summary reports that willshow whether agency missions and goals are effectivelybeing met within budget constraints and otherCongressional limitations.

—Operating managers need comparisons of planned workversus actual work accomplished and estimated costsversus incurred costs to help them manage theiroperations.

—Financial managers need detailed analyses ofallotments, obligations, and disbursements for eachunit in the agency.

This is where the financial managers can really make asignificant impact. They are severely challenged to designreports that meet the needs of each level of management inthe agency by summarizing and highlighting information thateach manager needs in making sound decisions.

The Comptroller General of the United States, at theNinth Annual Financial Management Conference, sponsored by

2 -

the JFMIP on March 3, 1980, emphasized the need for Govern-ment managers to use the information generated from theiraccounting systems. He concluded with:

"...I want to make an appeal to you to do your bestas financial managers to work toward providing good,sound financial and programmatic information...Noone will make the right decisions all of the time,but I think most decisionmakers' batting averageswould greatly improve if, in making their decision,they had accurate information to guide them."

It was with these principles in mind that JFMIP surveyedseveral agencies to identify reports in the financial manage-ment arena that assist management in effectively makingdecisions and controlling operations. Some of the examplesof good reports are illustrated and highlighted in thisbooklet. We would like to point out that certain technicalterms and report.formats were modified to generate widerinterest, to facilitate better understanding, and to providepotential user appeal.

Chapter 2 covers the Forest Service's reporting system thatprovides each level of management a tool to monitor theprogress of work and related costs.

Chapter 3 describes the Federal Reserve Banks' informationsystem that produces unit costs of operating activities andmakes comparisons of them among districts and offices as wellas with those of prior years.

Chapter 4 explains how traditional, commercial-type account-ing statements are used by the Clothing Factory of theDefense Logistics Agency and how its job order cost controlsystem improves employee efficiency and work standards.

Chapter 5 discusses how managers at the Environmental Protec-tion Agency use remote terminals to obtain readily andinstantly, specific financial and related data at the timeand in the format they desire to manage and monitor theirresponsible operations.

Chapter 6 provides a narrative on the "cradle-to-grave" grant

tracking system employed by the Office of Justice Assistance,Research and Statistics to insure that timely actions aretaken and to track grantee operations.

3 -

CHAPTER 2

THE PROGRAM ACCOUNTING AND MANAGEMENT ATTAINMENTREPORTING SYSTEM OF THE U.S. FOREST SERVICE

General

The Proyram Accounting and Management AttainmentReporting System (PAMARS) used by the U.S. Forest Servicecombines financial and work attainment information fordifferent levels of the organization. For each level ofmanagement (i.e., national office, regional office, forest,

subdivision and individual project) reports are preparedperiodically comparing planned expenditures and attainmentsagainst actual expenditures and attainments. Accordingly,PAMARS produces a hierarchy of reports that provide topmanagement down to the project manager and his/her staff theopportunity to monitor the progress towards achievingspecified financial and work targets and objectives.

PAMARS is designed to summarize data for each organiza-tional level as follows:

—To compare actual total obligations, costs and work

attainments to the planned obligations and workattainments at various levels of management.

--To compare the actual unit cost to the planned unit

cost for each work attainment unit (e.g., acres,bushels, etc.).

--To track total obligations and related accomplishmentsthrough the life (i.e., multi-year) of the project.

—To trace problem areas in total obligations and workattainments through the hierarchy of management downto the individual project level.

—To provide information for reports on total obliga-tions and expenditures.

--To satisfy requirements of other external reports.

A basic plan identifying funds to be utilized and outputtargets to be accomplished by region, forest and subdivisionprovides the primary information to start the accountingprocess. PAMARS uses a six digit project code whichidentifies different kinds of work performed to appropria-tions, budget activities, functions and accounting codes.This code is used on all documentation from the initial

4 -

submission of the plan until the project is completed. ThePAMARS system matches the work plan data with actual totalobligations and produces various reports used by agencymanagers for planning purposes and future budget estimates.

The following illustrative reports for, a major activity--Timber Reforestation—show how a top level manayer can

detect problem areas and is able to trace the problem throughthe Forest Service's hierarchy to the individual projectsinvolved.

National Summary Report

The National Summary Report shown in Illustration A-l,(page 8) provides the Chief of Forest Service with an overallview of the financial data and work attainments aggregated byRegion for Timber Reforestation. The first two columns ofthe report pertain to the Regions' operating plan and unusedfund balances. The Work Attainment columns for CurrentQuarter, Year to Date and Annual Targefc pertain to theaccomplishments that are planned and what was actuallyachieved. The two final columns compare the planned andactual unit costs.

As the Chief of Forest Service reviews the June 30report, it becomes obvious that Region A, among others, has aproblem in the work attainment area. The actual year to date(nine months) achievements are only 8 percent of the plannedgoals, with actual unit cost of $672 per acre as compared toplanned unit cost of $73 per acre.

Regi-onal Report

Further analyses can be accomplished by the Chief ofForest Service, by asking for the Regional report as shownin Illustration A-2 (page 9). This report foe Region Ashows the financial data and work attainments aggregatedby individual forest for which the Regional Office hasresponsibility. In reviewing this report the Chief or theRegional Manager can readily determine that the Barton Forestis one of the major problem areas. The year to date actualwork attainments are approximately 4 percent of the plannedgoals and the actual unit cost is $533 against the plannedunit cost of $34.

Individual Forest Report

In order to trace the problem, further analyses canbe accomplished by reviewing the Individual Forest SummaryReport for Barton Forest as shown in Illustration A-3

5 -

(page 10). The report shows the financial data and workattainments for all subdivisions for which the Barton ForestManager is responsible. In Illustration A-3y the Barton ;Forest Report shows that the Bristol Lake Subdivision is oneof the major problem areas. The year to date actual workattainments are approximately 5 percent of the planned goals,and the actual unit cost is $320 compared to the planned unitcost of $23. (Similar analyses can be made of other sub-divisions and analyses can be pursued as follows for theBristol Lake Subdivision.)

Forest Subdivision Report

Illustration A-4 (page 11) shows the financial data andwork attainments for all individual projects for TimberReforestation in the Bristol Lake Subdivision. At thispoint, the manager can readily identify Project 712981 as themajor problem area. The report shows the actual year to datework attainments as 280 acres as compared to the year to dateplan of 6,634 acres. The shortage of work achievementsincreases the actual unit cost per acre to $349, while theplanned unit cost per acre was $20, a difference of $329.peracre.

Project Report

In order to analyze the specific problem, the next stepis to look at the Project Statement shown in IllustrationA-5 (page 12). The Project Statement is a monthly reportwhich combines financial and quantitative informationpertaining to a particular project. The first section of thereport shows a comparative analysis of the operating plan andexpenses, by object class of expenditures and the unobligatedbalance available for use. The second section of the reportshows the cumulative status of the work attainments byquarter, comparing plan to actual as well as reflecting theunit cost.

For the Project 712981, Site Preparation For Planting,the report shows, while substantial expenses have beenincurred through the 3rd quarter, the actual work attainmentshave fallen short of the plan. Also, the actual unit costper acre is $349 as compared to the planned unit cost of $20per acre.

The purpose of this report is to provide the ProjectManager with sufficient financial and work attainment data sothat he/she can further analyze each project on a monthlybasis, and to take corrective action to bring the actualattainment and costs in line with the planned attainment and

6 -

costs. Major problems are reported up the managementhierarchy to the appropriate level that can make the propermanagement decision to correct the problems. For example, '

when a project is determined not to be cost-effective orbeneficial, it may be terminated in order to transfer itsfund balance to a more productive project in the sameactivity category.

For further information, please contact:

Director, Fiscal and Accounting Management(703) 235-8130.U.S. Forest Service - USDA

P.O. Box 2417Washington, DC 20013

7 -

U.S. POKES! SERVICE

NATIONAL SOMMARf REPORTFOR

TIMBER REFQRESTATIONAS CF JUNE 30, 1980

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I

REGION

Region A

Region B

Region C

Region D

Region E

PROGRAMTOTAL

FUNDS PEROPERATINGPLAN

$2,457,786

786,312

4,433,085

43,109,806

1,203,520

$51,990,509

UNUSEDFUNDBALANCE

$ 1,385,464

362,699

2,709,048

23,658,644

339,427

$28,455,282

WORK ATTAINMENTSCUEBENTPLANNED

12,017

2,210

17,319

59,503

5,472

96,521

QUARTERACTUAL

1,595

-0-

11,102

39,968

2,116

54,781

(In Thousands of

YEAR TOPLANNED

19,178

5,483

21,167

91,666

9,240

146,734

DATEACTUAL

1,595

-0-

11,102

41,114

5,218

59,029

tores)ANNUALTARGET

33,734

8,011

28,700

227,701

10,453

308,599

UNITPLANNED

$ 73

98

154

189

115

$168

COSTACTUAL

$672

-0-

155

473

165

$398

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I

U.S. FOREST SERVICEREGION "A" SUMMARY REPORT

FORTIMBER REFORESTATIONAS OF JUNE 30, 1980

FOREST

Deerlake

Flatrock

Coventry

Red River

Butte

Robin

Barton

FUNDS PEROPERATING

PIAN

$ 48,551

848,164

35,931

19,502

642,202

30,842

588,422

UNUSEDFUND

BALANCE

12,961

734,829

775

15,192

268,031

1,727

283,726

WORK AOTAINMENECURRENTPLANNED

390

412

357

-0-

1,606

-0-

8,774

QUARTERACTUAL

-0-

294

-0-

-0-

-0-

-0-

571

(In Thousands ofYEAR TO DATE

PLANNED

390

490

417

-0-

2,467

-0-

14,936

ACTUAL

-0-

294

-0-

-0-

-0-

-0-

571

Acres)ANNUALTARGET

1,414

2,273

1,024

-0-

9,120

433

17,137

UNIT COSTPLANNED ACTUAL

$ 34

373

35

-0-

70

71

34

$ -0-

385

-0-

-0-

-0-

-0-

533

White Oak

PROGRAM TOTAL $2

244

,457

,172

,786 $1,

68

385

,223

,464 12

478

,017 I/

730

595 19

478

,178 I/

730

595

2

33

,333

,734

105

$ 73 $

241

672

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U.S. FOREST SERVICE

INDIVIDUAL FOREST SUMMABY REPORT FCR BARTCN FORESTFOR

TD1BER REFORESTATIONAS OF JUNE 30, 1980

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SUBDB/ISION

Blackburn Road

Bristol Lake

Owl Road

Oak ?>ad

Pines Road

Fawn Road

PROGRAM TOTAL

FUNDS PEROPERATING

PIAN

$ 13,674

186,690

95,217

22,895

259,246

10,700

$588,422

UNUSEDFUNDBALANCE

$ 2,219

72,870

60,532

7,931

136,540

3,634

$283,726

WORK ATTAINMENTSCURRENTPLANNED

105

2,557

430

-0-

5,623

59

8,774

QUARTERACTUAL

-0-

355

-0-

216

-0-

-0-

571

(In Thousands ofYEAR TO

PLANNED

1,605

6,980

430

216

5,646

59

14,936

DATEACTUAL

-0-

355

-0-

216

-0-

-0-

571

acres)

ANNUALTARGET

1,605

8^250

630

309

6,284

59

17,137

UNIT COSTPLANNED ACTUAL

$ 8

23

151

74

41

181

$ 34

$ -0-

320

-0-

69

-0-

-0-

$ 533

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Ih3MQz>u

U.S. RAREST SERVICE

PROJECT STATUS FCR BRISTOL LAKE SUBDIVISIONFOR

TIMBER REFORESTATIONAS CF JUNE 30, 1980

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INDIVIDUALPROJECTCODE

710001

789100

654031

712981

PR3GRAM TOTAL

FUNDS PEROPERATING

PLAN

$ 7,864

8,895

7,856

162,075

$186,690

UNUSEDFUND

BALANCE

$ 36

7,449

1,144

64,241

$72,870

WORK ATEAINMENTECURRENTPLANNED

216

-0-

130

2,211

2,557

QUARTERACTUAL

-0-

-0-

75

280

355

(In Thousands of

YEAR TO DATEPLANNED

216

-0-

130

6,634

6,980

ACTUAL

-0-

-0-

75

280

355

Acres)

ANNUALTARGET

216

98

130

7,806

8,250

UNITPLANNED

$ 36

91

60

20

$ 23

COST1 ACTUAL

$ -0-

-0-

89

349

$320

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ILLUSTRATION A-5 ILLUSTRATION A-5

U.S. FOREST SERVICEPROJECT STATEMENT

SITE PREPARATION FOR PLANTINGPROJECT CODE 712981AS OF JUNE 30, 1980

FINANCIAL STATUS

AMOUNT PER OPERATING PLAN

EXPENDITURES AND OBLIGATIONS:

SALARYEQUIPMENT RENTALMATERIALS & SUPPLIESTRAVELADP

TOTAL

PAYMENTS

$ 55,50010,200

3002,400

10,000

$ 78,400

UNPAIDOBLIGATIONS

$ 5,4002,500

9004,5006,134

$19,434

$ 162

$ 97

,075

,834

1st QUARTER

2nd QUARTER

Year to Date

3rd QUARTER

Year to Date

4th QUARTER

Annual

(In Thousands of

PLAN

2,211

2,212

4,423

2,211

6,634

1,172

7,806

Acres)

ACTUAL

-0-

-0-

-0-

280

280

YEAR-TO-DATE UNIT COST $ 20 $349

UNOBLIGATED BALANCE AVAILABLE FOR USE $ 64,241

PLANNED vs. ACTUAL ATTAINMENTS

12 -

CHAPTER 3

THE PLANNING AND CONTROL SYSTEM OF THEFEDERAL RESERVE BANKS

General

The Planning and Control System of the Federal ReserveBanks provides various levels of management hierarchy withneeded financial information through (a) standardized expenseaccounting and reporting, (b) better expense and productivitydata and (c) closer coordination with the budget and planningprocesses.

Federal Reserve Bank officials indicated that since thisSystem was implemented, the overall productivity has improvedand costs decreased. Specific benefits of the system are:

--Top level managers can readily detect problem areasfor quick resolution.

--Cost and performance information is generated at a

meaningful .activity level and can be aggregated up themanagement hierarchy to accommodate managementinterest at various levels.

—The unit production costs at the activity level can beeasily compared among districts and their offices.

—Unit production costs at the activity level areautomatically compared with those of the previousyear.

—Comparative analysis is facilitated between actualcosts and budget plans.

--Because of the "total visibility" of the comparativecosts and performance information, managers at alllevels are challenged to increase productivity anddecrease cost in comparison with others.

The following are examples of some of the reports usedby the Federal Reserve Banks to improve efficiency andeffectiveness.

Summary Cost Cpmparison Report byDistrict For Major Functions

This report shows, for each District, the total cost bythe major function and the percentage of change in cost from

13 -

the previous year. Each District performs four major operat-ing functions:

—Monetary and Economic Policy;

--Services to the U. S. Treasury and Government

Agencies;

--Services to Financial Institutions and thePublic, and

--Supervision and Regulations.

A portion of the Summary Report depicting two of themajor functions is shown in Illustration B-l (page 16). At aglance, top-level managers can see the variance in the totalcosts for a particular function among the Districts. Thereport shows overall increases or decreases in the costs fromthe previous year in each functional area. Unusual changesin costs can be analyzed using other reports, including thosethat follow.

Summary Cost Comparison Report byDistrict For Major Services

Each major function, as described in the narrative ofthe previous report, has a further breakdown into specificservices. For example, the major function, "Services to the

U.S. Treasury and Government Agencies," consists of thefollowing specific services:

--Savings Bonds,--Other Treasury Issues,

--Government Agency Issues,--Other Treasury and Government Agency Issues,

--Treasury and Government Agency Coupons,

—Food Coupons,—Government Accounts and--Federal Taxes.

Each specific service is further divided into activities.For example, the Savings Bond Service consists of thefollowing activities:

—Original Issue,

--Accountiny for Stock,

--Reissues and Replacements,—Direct Redemptions and—Processing Retired Bonds.

14 -

A portion of this Summary Report, showing two activitiesof the Savings Bonds Service, is shown in Illustration B-2(page 17). This report provides a ready comparison of unitproduction costs at the activity level and among thedistricts, and indicates whether unit costs have increasedor decreased since the previous year. It provides a readymeans to spot problem areas or potential problem areas.Other reports are generated to further analyze these areas;two such reports are described in the following.paragraphs.

Detailed Cost Comparison Report byDistrict and Office

This report shows the amounts of expenses incurred foreach category (personnel, material and supplies, equipment,etc.) at the activity level of each District and its Offices,where they exist. When production costs appear to be highor out of line in the previously illustrated reports, thisDetailed Report identifies the specific categories of expensethat need attention in that activity. A portion of theDetailed Report is shown in Illustration B-3 (page 18).

Detailed Productivity Comparison Report byDistrict and Office

In addition to the expense data, this agency maintainsproductivity measurement at each activity level. Thisreport indicates productivity at the activity level for eachDistrict and Office. The report shows the productionstatistics, staffhours consumed, units of production perstaffhour and production cost per unit.

These statistics will be used in comparing the accom-plishments among Offices and Districts. These statistics canbe used to analyze production in terms of the degree ofautomation in each area. An example of a Detailed Report for"original issue" activity of the Savings Bond Service isprovided in Illustration B-4 (page 19).


Alice Hall, (202) 452-3915Federal Reserve Board20th and Constitution Avenue, NWRoom M4410Washington, DC 20551

15 -

ILLUSTRATION B-l ILLUSTRATION B-l

SUMMARY OOST COMPARISON REPORT BY DISTRICTFOR MAJOR FUNCTIONS

QUARTER, 198"(IN THOUSANDS) —

MAJOR FUNCTIONS

DISTRICT

DISTRICT I

DISTRICT 11

DISTRICT HI

DISTRICT IV

DISTRICT V

DISTRICT VI

DISTRICT VII

SYSTEM TOTAL

-U.S. TREASURY AND

GOVERNMENT AGENCIES

TOTALCOST

$1,171

4,866

1,061

1,638

1,422

1,777

2,694

14,629

% CHANGEFROM

YEAR AGO

-17.8

- 1.5

- 4.2

6.5

5.4

2.2

- 3.1

0.1

MONETARY ftNDECONOMIC POLICY

TOTALCOST

$ 572

3,501

709

410

499

517

638

$6,846

% CHANGEFR3M

YEAR AGO

2.5

-3.7

26.3

18.6

33.5

18.9

.3

8.1

16 -

ILLUSTRATION B-2 ILLUSTRATION B-2

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DETAILED OOST OOMPAKESCN REPORT BY DISTRICT AND OFFICE

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OFFICEAND

DISTRICT

OFFICE AOFFICE B

DISTRICT I

OFFICE COFFICE D

DISTRICT II

DISTRICT III

OFFICE EOFFICE FOFFICE G

DISTRICT IV

FOR SERVICES PROVIDEDFOR "ORIGINAL ISSUE"

PERSONNEL

$

$

$

$

$

$

21.06.0

27.0

82.04.0

86.0

29.0

25.04.0

35.0

64.0

TO U.S. TREASURY ANEACTIVITY IN HftNDLINC

QUARTER, 198TIN THOUSANDS)

MATERIALSAND

SUPPLIES

$ 2.01.0

$ 3.0

$ 2.0.5

$ 2.5

$ 1.0

3.01.0

7.0

$11.0

EQUIPMENT

$ 1.0.5

$ 1.5

$ 2.7.3

$ 3.0

$ .1

$ 1.0

$ 1.^

GOVERNMENT AGENCIESSAVINGS BONDS

TKA\

$ ly

$1

•

$ 7.[

5.(

3

$ 27.;

0

500

5

SUPPORTOOSTS

$ 15.02.0

$ 17.0

$ 25.01.0

$ 26.0

$ 16.0

$ 29.02.0

53.0

$ 84.0

TOTALCOSTS

$ 39.010.0

$ 49.0

$131.06.0

$137.0

$ 49.0

$ 62.06.0

99.0

$167.0

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DETAILED PRODUCTIVITY COMPARISON REPORT BY DISTRICT AND OFFICEFOR SERVICES PROVIDED TO U.S. TREASURY AND GOVERNMENT AGENCIES

FOR "ORIGINAL ISSUE" ACTIVITY IN HANDLING SAVINGS BONDSQUARTER, 198

t1r-aen1-3

I

U3

I

OFFICEAND

DISTRICT

OFFICE AOFFICE B

DISTRICT I

OFFICE COFFICE D

DISTRICT 11

DISTRICT HI

OFFICE EOFFICE FOFFICE G

DISTRICT IV

TOTALBONDS

ISSUED(In Thousands)

1185

123

9476

953

125

4472

1,079

1,528

STAFFHOURSCONSUMED

(In Thousands)

1,523470

1,993

6,782502

7,284

3-, 5 24

3,949534

4,384

8,867

UNITSPER

STAFFHOUR

7710

62

14012

131

61

1135

246

172

PRODUCTIONCOST PER

UNIT

$ .181.05

$ .32

$ .131.02

$ .14

$ .22

$ .13

2.57.09

$ .10

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CHAPTER 4

COMMERCIAL TYPE FINANCIAL STATEMENTS AND JOBORDER ACCOUNTING SYSTEM AT THE CLOTHING FACTORY

DEFENSE PERSONNEL SUPPORT CENTER

General

The Directorate of Manufacturing (Clothing Factory)manufactures clothing and textile ifcems for all Department ofDefense components. It produces those items which may berequired on short notice, in small lots or special measure-

ment, or under other conditions which make procurement fromcommercial sources impossible or impracticable.

The Clothing Factory is financed through the DefenseIndustrial Fund, a form of revolving working capital fund.Working capital is used to finance the cost of producinggoods ordered by customers, and the Clothing Factory isreimbursed for the goods furnished. As a general policy, theClothing Factory operates with the objective of financiallybreaking even over the long run. This requires accurate,timely, complete and useful financial information to controland manage the Clothing Factory operations. Reports of thefinancial condition and operations are consequently used bymanagers and are required to be submitted annually to thePresident and the Congress.

Commercial Type Financial Statements

Financial condition and operating statements are pre-pared by the Clothing Factory in accordance with generallyaccepted accounting principles that govern private industryreporting. A condensed Statement of Financial Condition forthe Clothing Factory is shown in Illustration C-l (page 24).It identifies the cash balance held in the United StatesTreasury, accounts receivable and payable, and other accountsused to report financial activities. From the information inthe statements, past and present, and other subsidiaryrecords, cash flow analyses are made to determine whether

adequate cash is on hand to sustain operations as presentedin Illustration C-2 (page 25). The managers determinewhether enough assets, quickly convertible to cash, areavailable to purchase necessary materials and supplies, meetpayrolls and make other required payments.

In this connection, additional analyses of various othersubsidiary statements and records can be and are made toidentify significant conditions impacting the agency'sfinancial condition, such as delays in collecting receivables

20 -

and excess inventories. For example, the current account

balances in the receivables accounts are simply comparedwith those of the beginning of the year to determine whethercollections of payments are improving. In addition, aschedule for aging account receivables by transaction,customer and agency is used to pinpoint delinquent customers,to detect general customer problems, and to take appropriatecollection actions.

Inventory control is also improved by analyses whichprovide data for each inventory item such as amounts ofinventory on hand, on order and issues made to project ordersand to operating organizations. These data are constantlyreviewed to determine whether sufficient, but not excess,inventory is on hand and on order and whether operatingorganizations are utilizing materials and supplies in anefficient manner.

By looking at a condensed Statement of Operations, asshown in Illustration C-3 (page 26), the managers can quicklydetermine whether the objective of financially breaking evenis being generally met during the month, cumulatively for thefiscal year and cumulatively since the inception of theworking capital fund. A narrative to the Statement providesan explanation of how well the objective is being met. Inorder to review elements of costs that may be out of line,the condensed Statement of Operations is supported by adetailed cost statement for the total manufacturing opera-tions as shown in Illustration C-4 (page 27). This statementcompares the actual costs to budgeted costs for each item ofdirect and indirect costs incurred for the month andcumulatively for the fiscal year. If any item is out ofline, similar statements are prepared for each of the majororganizational elements for further detection and analyses ofproblem areas. Through these and other reviews and analyses,early disclosure of problems and corrective action arepossible.

Job-Order Cost System

In addition to analyzing the financial statements, theClothing Factory uses a job-order financial management systemto assist in controlling manufacturing costs. Also, inte-grated with the job-order system is a unique employee payrolland performance measurement system. The key feature of thesystems is the incentive pay plan by which compensation isbased on both the skill level and performance. (The ClothingFactory is the only place in the Federal Government whereemployees are paid on a piece-work basis.) These combinedsystems provide management with a tool to track individual

21 -

job orders and to measure individual.employee and groupperformance in relation to other individuals and groups, aswell as against standards of Operation.

The weekly Job Order - Labor Costing reports, as shownon Illustration C-5 (page 28), allows for monitoring thedirect labor and the use of overtime for any job in themanufacturing process. The report provides a summarization,by each cost center, of weekly labor charges applied againsteach job order. It includes regular hours and earnings,

fringe benefits, overtime hours and earnings, total directlabor, total overhead and the total labor charge for theperiod. Any major deviation is investigated for correctiveaction.

Illustration C-6 (page 29) shows how the performance ofa cost center is monitored to highlight high and low perform-ance. The sample report presents a week's performance,

compared with standards, of all the employees within a costcenter, identified by job number, the article being producedand the specific operation performed. Sustained high per-formance may highlight those areas for which the performancecriteria may need to be evaluated. Low performance, on the

other hand by one employee may indicate a need for traininyor other remedial action as further analyzed in the nextreport.

A sample report on one employee's pay and performancefor the period is shown in Illustration C-7 (page 30). Suchreports are used to process payroll information and tomonitor individuals' performances. For payroll purposes, an

employee earns extra compensation by exceeding the standardnumber of units. Also, the system provides information onthe inability of employees to meet the standard and allowsfor a continual monitoring of their performances. Thissystem supports management in their effort to properly alignemployee skills with job requirements and in maintaining aproductive workforce.

The two preceding reports reflect on the same employeeand cost center, thus, presenting an individual as well ascollective performance. The same data base provides a sourcefor various analyses by managers, operational as well as

support.

On a weekly basis, a summary job order control ledger,

as shown in Illustration C-8 (page 31), is updated to enablemanagers to monitor job order progress. The control ledgercompares actual units produced against planned units andactual labor costs incurred against budgeted costs through

22 -

each stage of production on a weekly basis and on acumulative basis. In this illustration, it is shown that asignificant cost deviation had occurred in the first periodof stitching operation. It is further shown that, after theproblem was encountered, action was taken to quickly correctthe deviation. As a result, the cost of the process wasreduced significantly in the following periods. Aftercompletion of the job, this data can also be used to updateand evaluate the Clothing Factory's cost estimating database.


Daniel J. Cirminiello (215)952-3903Clothing FactoryDefense Support Center2800 South 20th StreetPhiladelphia, PA 19101

23 -

M•t^

CLOTHING FACFOKYSTATEMENT OF FINANCIAL ODNDITION

AS OF MARCH 31, 1980

ASSETS

Fund Balance with U.S.Accounts ReceivableInventoriesOther Assets

Treasury

TOTAL ASSETS

LIABILITIES

Accounts PayableAccrued Expenses

TOTAL LIABILITIES

$ 811,2311,042,424

$1,373,29353,472

3,740,48252,992

$5,220,239

Mftrlaenh3».>':h-3

MQ2i

nI

$1,853,655

CAPITAL

Appropriations and ReappropriationsAssets CapitalizedAccumulated Operating Results

$1,571,0291,417,093

378,462

TOTAL CAPITAL

TOTAL LIABILITIES AND CKP1TKL

$3,366,584

$5,220,239

ft1aenh3»>^MQ2:

n

ILLUSTRATION C-2 ILLUSTRATION C-2

CLOTHING FACTORYCASH AVAILABILITY ANALYSIS

AS OF MARCH 31, 1980

Cash Balance with Treasury $1,373,293Accounts Receivable Balance 53,472

Total Quick Assets , $1,426,765

Accounts Payable $ 811,231Accrued Payroll 538,114Other Accruals 51,033Projected Operations Expenses 3,130,845

Cash Requirements $4,531,223

Cash Deficiency $3,104,458

Narrative Analysis

The cash deficiency continues to remain in excess of thesafety factor formula. Our cash position for the past yearhas not been sufficient to support our monthly operatingexpense plus liabilities. We are currently evaluating theneed to request an additional cash allocation to alleviateour cash deficiency.

25 -

Earned Revenue

Total Cost IncurredManufacturing

CLOmHSK FACTORYSTATEMENT OF QPERftTIONS

MARCH 1980

MARCH CUMULATIVE

$2,625,546

$1,799,646 $12,523,381

$12,365,066

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Vfork-in-Process

(Increase) Decrease

Costs of Goods andServices Produced

Current Operating Results(Revenue Minus Cost)

Operating ResultsBeginning of Year

Accumulated OperatingResults

424,311 26,717

$2,223,957

$ 401,589

$12,550,098

$ ( 185,032)

$ 563,494

$ 378,462

Narrative Analysis

Fiscal year-to-date operations resulted in costs exceeding earned revenue by$185,032. This is in line with our objective to bring our net accumulated operatingresults within the guideline of a break-even financial position.

Mt-1E-1

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ILLUSTRATION C-4 ILLUSTRATION C-4

CLOTHING FACTORYSTATEMENT OF MANUFACTURING COSTS

PERIOD ENDING MARCH 31, 1980

COST ELEMENT

Direct Costs:Direct LaborOther Direct

Total Direct Costs

ManufacturingOverhead Cost:

Supervision

Indirect Labor

Quality ControlInspection

Premium Pay Overtime

Minimum Wage Buildup

Other Labor Costs

Travel/Transportat ion

Indirect Materials

Repair Parts

Dist. ServiceVnit Cost

Other Mfg Overhead

Discounts Lost

Total ManufacturingOverhead Cost

Total SupportCost

Total Overhead

Total Costs

$1

$1

$

$

$_

$

$1

CURRENT

ACTUAL

,270,062163,126

,433,186

111,070

84,684

1,160

8,751

1,841

1,078

35

1,231

28,756

17,438

2,660

101

258,940

107,518

366,458

,799,646

MONTH

$1,]

$1,;

$

$

$

i_

$2,(

BUDGET3UDGET

,156,615148,555

,305,170

116,171

56,892

1,353

8,684

1,992

3,502

33

9,727

17,119

394,243

2,323

263

603,251

108,760

712,011

,017,181

YEAR TO DATE

ACTUAL

$7,108,799939,071

$8,047,870

$ 619,076

477,780

3,444

34,818

8,465

20,496

1,659

18,860

128,025

2,499,115

26,024

1,799

$ 3,839,561

$ 635,950

$4,475,511

$12,523,381

BUDGET

$6,704,392885,649

$7,590,041

$ 675,691

329,211

7,722

41,700

11,627

20,952

198

35,984

72,627

2,187,160

19,939

1,578

$ 3,404,389

$ 654,143

$ 4,058,532

$11,648,573

27 -

M00

CLOTHING FACTORYJCB ORDER - WEEKLY LABOR COSTING

WEEK ENDING APRIL 17, 1980

JOB ORDER NO. 60340ARTICLE NO. 357 TROUSERS, UTILITY DUEAPRESS POLY/CTN WILL

^OSTCE3\TTER

110

115

226

233

235

236

237

239

326

432

TOTAL

REGULAR

HOURS EARNINGS

19.4 $ 164.63

87.9 535.62

9,778.7 64,538.68

24.0 166.08

506.5 3,202.74

644.6 5,698.14

119.3 647.51

15.2 66.78

2.0 15.42

38.0 281.98

11,235.6 $75,317.58

FRINGEBENEFITS

$ 55.98

182.09

21,943.10

56.46

1,088.89

1,937.36

220.22

22.68

5.24

95.87

$25,607.89

OVERTIME*

HOURS

8.0

745.7

26.0

16.8

796.5

EARNINGS

$ 112.88

8,061.90

262.14

137.62

$8,574.54

DIRECT LABOR

$ 295.85

717.71

91/856.08

357.28

4,383.38

7,635.50

867.73

69.46

20.66

377.85

$106,641.50

TOTAL

OVERHEAD

$ 237.57

576.27

58,512.38

253.08

2,792.38

4,863.81

552.77

57.01

11.96

215.00

$68,072.23

CHARGE

$ 533.42

1,293.98

15,638.46

650.36

1,175.76

11,499.31

1,420.50

146.47

32.62

592.85

$174,713.73

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*0vertune is usually distributed to regular pay and overhea3 costs; therefore, the totals of regularearnings, finge benefits and overtime earnings will not necessarily equal the total direct labor amounts.

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CLOTHING FACTORYCOST CENTER - PERFORMANCE

WEEK ENDING APRIL 17, 1980

COST CENTER 237 BRICKHMG, PACKING AND SHIPPINGJOB NO. 60340 ARTICLE NO. 357 TROUSERS, UTILITY DURAPRESS POLY/CTN WILL

OPERATIONNUMBE3R

30

30

30

30

30

30

30

90

100

120

150

150

160

EMPLOYEENUMBER

906073

906075

931301

931301

931301

931422

931422

957861

926880

949213

915753

940464

939712

UNITSACTUALLYPRODUCED

120

300

1,092

1,452

1,524

60

1,488

480

180

120

20

200

600

- HOURS

ACTUALLYWORKED

2.5

4.0

6.7

8.0

8.0

1.1

8.0

3.8

1.2

1.0

.2

3.0

8.0

"STANDAKD HOJRS-

TO ACCOMPLISHACTUAL UNITS

PRODUCED

1.0

2.5

9.1

12.1

12.7

.5

12.4

5.9

1.8

.6

.5

5.1

12.9

EMPLOYEE'SPERTORMANCEEFFICIENCT

40

63

136

151

159

45

155

155

150

60

250

170

161

STATUS

LOW

LOW

HIGH

HIGH

HIGH

LOW

HIGH

HIGH

HIGH

LOW

HIGH

HIGH

HIGH

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CLOTHIMG FACTORYINDIVIDUAL EFFICIENCY REPORTWEEK ENDING APRIL 17, 1980

COST CENTER 237 BRICKING, PACKIN3 AND SHIPPING

EMPDD^EENUMBER

931301

931301

931301

931301

931301

931301

931301

931301

931301

931301

931301

TffSKL

OPERATIONNUMBER

25

30

30

30

192

25

36

36

36

36

36

UNITSACTUALLYPRODUCED

39

1,452

1,092

1,524

11

320

80

20

220

2

HOURSACTUALLY

WORKED

1.7

8.0

6.7

8.0

.3

.5

7.8

1.6

.5

4.7

.2

40.0

STANDARD H3URSTO ACCOMPLISHACTUAL UNITS

PRODUCED

1.3

12.1

9.1

12.7

.4

12.1

3.0

.8

8.3

.1

EMPLOYEE'SPERFORMANCEEFFICIENCY

76

151

136

159

80

155

188

160

177

50

151

KATE CFPAY

$ .1380

.1974

.1974

.1974

**8.0100

.1380

.1974

.1974

.1974

.1974

.1974

TOTALPAY

$ 6.727

63.168

47.376

66.129

2.403

1.897

63.168

15.792

3.948

43.428

.493

$314.53

**This effort was charged to a job order, hDwever it was a stort run for \^tidi no standards weredeveloped, but for which a rate is established based on the average earnings for the previousquarter. Ihis shows the flexibility under which different rates can be used within a pay period.Other standard rates for overtime, night shift and leave co^ built into the system.

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CLOTHING FACTORYSUMMARY JOB ORDER

CONTROL LEDGER

JOB ORDER 9141ARTICLE NO. 385 Sock, Extreme Cold WeatherORDER QUANTITY 40,000

PLANNEDPRODUCTION

ACTUALPRODUCTION

WK END Mar. 27CUMULATIVE

WK END Pf>r. 3CUMULATIVE

WK END ^r. 10CIMJIATB/E

WK E2S1D ^pr. 17CIMJLATB/E

WK EM) Apr. 24CUMULATIVE

WK EM) May 1CUMdATB/E

CUTTINGUNif

40,800

18,25018,250(45)

22,25040,500(99)

40,500(99)

40,500(99)

40,500(99)

40,500(99)

3WISION"COST"

$3,400

1,3501,350(40)

1,7003,050(90)

3,050(90)

3,050(90)

3,050(90)

$3,050(90)

STITCHING DIVISIONUNiTCOST

40,500

9,1259,125(23)

10,12519,250(48)

10,25029,500(73)

10,90040,400(99)

40,400(99)

$27,500

$10,00010,000(36)

6,67516,675(61)

6,82523,500(85)

7,87531,375(114)

$31,375(114)

FINISHINGUNITS

40,400

4,0004,000(10)

9,20013,200(33)

9,00022,200(55)

10,00032,200(80)

8,00040,200(100)

3IWSTCTTCOST

$1,950

$ 425425(22)

8001,225(63)

8752,100(108)

8702,970(152)

805$3,775(194)

"TOTAL"COST

$32,850

$ 1,3501,350(4)

12,12513,475(41)

7,47520,950(64)

7,70028,650(87)

8,64536,295(110)

80538,100(116)

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( ) donates percentage toward planned data.

1-1t-1

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nI

oo

CHAPTER 5

THE SOFTWARE PACKAGE FOR UNIQUE REPORTS OFTHE ENVIRONMENTAL PROTECTION AGENCY

General

The Software Package for Unique Reports (SPUR) used bythe Environmental Protection Agency is a tool designed toinstantly provide managers with specific financial andrelated data. Managers, with little ADP familiarity, canmanipulate and produce a variety of tailor-made reports

through terminals to suit their particular needs. SPUR'Sprimary purpose is to complement the standard reportsproduced periodically by the financial management system andprovides managers flexible means to obtain information at thetime fchey need it, rather than waiting for periodic reportsuntil the end of a month or a quarter.

SPUR is easy to learn and easy to use, but has powerfulcapabilities. Some of the benefits derived in using SPURare:

—Personnel of all echelons who are unfamiliar with dataprocessing techniques can create and produce thespecific type of reports they need. All they need todo is follow the step-by-step instructions provided inthe Users' Guide.

--SPUR reports are produced more rapidly and at lowercost than if the same reports were designed andproduced by the ADP staff.

--The ADP staff has more time to concentrate on more

complex systems designs.

--Regional personnel have direct access to currentinformation.

SPUR allows a user direct access to the financialmanagement system data base. In order for the user to accessonly the information needed to produce the report, the usermust complete six statements of information, each of whichdescribes and specifies the desired report format andcontents. These statements of information should include thereport classification, fiscal year, title of created report,data to appear on report, items to be totaled and anyrestrictions that should be placed on the reported data.

32 -

To complete the required statements, the User's Guideincludes a Data Element Dictionary which contains all of thedata elements in the financial management system's data base.Some of the information included in the data base which areaccessible to the user through SPUR are:

--Appropriations and other funding authorities,--Program plans,

--Work plan targets,--Allowances,

--Accounting symbols,--Commitments, obligations and disbursements,

—Advances,—Grants information,--Payroll data and--Hours and workyears.

The following are examples of types of reports that canbe created instantly using the SPUR System.

Comparison of Operating Plan WithObligations and Commitments

The SPUR system allows the generation of reports compar-ing operating plans with actual obligations and commitmentsat various organizational levels--agency, allowance holder,

division, branch and project manager. The reports can betailored for agency-wide analyses or can be limited to thefinancial data applicable to each responsible allowanceholder, division chief or branch manager. Each level hasaccess to the system and can create and produce reports tosuit its special needs. At each of these organizationallevels, financial data can be identified as to appropriation,budget activity, program, program element, project and objectclass of expenditures.

An allowance holder can generate a report, such as the

one shown in Illustration D-l (page 35), instantly to comparean annual plan against the actual rate of obligations andcommitments and to determine the balance that is still avail-able for future use. This particular report is summarized ata program element level. Other reports can be produced at amore aggregate level or more detailed level of informationfor the allowance holder if he/she desires.

Illustration D-2 (page 36), is a type of report a divi-sion chief may need. The report shows, for each programelement, the annual plan for types of expenditures involved,the amounts of obligations and commitments for each expendi-ture type, and whether actual amounts are within or exceeding

33 -

the planned amounts for each expenditure type. The reportenables division chiefs to monitor their programs and takecorrective action or funding adjustments before seriousproblems arise. This kind of data can also be aggregated orprovided more detail to suit the users, in order to bettermanage their responsible area.

Grant Activity Reports

A variety of grant information is entered into thefinancial management system's data base. This informationshows, by grantee and account number, the amounts for grant

awards made, cumulative payments, unpaid obligations andadvance payments, plus the last date of action. This infor-mation can be further tapped by managers, through the use ofSPUR, to provide tailor-made analyses of various yrant statusand transactions. Two examples are provided to demonstratebeneficial use that can be made of grant information.

Illustration D-3 (page 37) lists, by grantee, whichgrants have been fully paid, but still have outstandingadvances. This type of report is useful to the grantsmanagers as a monitoring device in order to take action on

the long outstanding advances.

Illustration D-4 (page 38) is a report showing thegrantees that have unpaid obligations for an extended periodof time without having submitted a request for payment. Itshows by grantee and award document the amounts of unpaidobligations and corresponding last action date. This type ofreport is useful to the grants managers as a monitoringdevice for taking necessary corrective action and assists theaudit function by highlighting long periods of inactivity.

Numerous other types of analyses of grants can be madeusing the SPUR system.


Mike Kaplan, (202) 755-0911Environmental Protection Agency401 M Street SWRoom 3618 (PM226)Washington, DC 20460

34 -

ILLUSTRATION D-l ILLUSTRATION D-l

y

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r^»»

inn

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•fus

*n

inOt

in^Otcr>•q<

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hit

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35 -

ENVIRONMENTAL PROTECTION AGENCYAIR & HAZARD DIVISION

DOLLAR TARGETS VERSUS ACTUALRESPONSIBILITZ CENTER/PROGRAM ELEMENT/C&JECT CIASS

AS CF(IN THOUSANDS)

t-1

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aM

ua\

PK)GRAMELEMENTID NO.

2AD6

2AF6

TOPE OFEXPENDITURE

Personnel CompensationTravelTrainingOther Contractual ServicesEquipmentAll Other

Total Proyram Element

TravelTrainingOther Contractual ServicesEquipmentAll Other

Total Program Element

ANNUALPLfiN

$ 16,20059,000

030,00010,00032,000

$147,200

$ 7,80000

5,5002,500

$ 15,800

TOTALOBLIGATIONS

$ 23,37461,3602,983

29,22914,79130,911

$162,648

$ 6,128250306

3,0312,224

$ 11,939

OUTSTANDINGCOMMITMENTS

$ 01,263

02,354

00

$3,617

$2,03600

2,2320

$4,268

OVER (+) ORUNDER (-)ANNUAL PLAN

$+ 7,174+ 3,623+ 2,983+ 1,583+ 4,791

1,089

$+ 19,065

$+ 364+ 250+ 306

237276

$+ 407

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ILLUSTRATION D-3 ILLUSTRATION D-3

D

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r~-

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r\l

4;

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38 -

CHAPTER 6

THE "CRADLE-TO-GRAVE" GRANT TRACKING SYSTEM OF THEOFFICE OF JUSTICE ASSISTANCE, RESEARCH AND STATISTICS

General

The Office of Justice Assistance, Research, and Statis-ties (formerly the Law Enforcement Assistance Administration)maintains an automated information system operated by theOffice of the Comptroller that monitors grants, contracts andinteragency agreements from cradle to grave, that is, fromapplication receipt through grant award, grant closeout andstorage of grant files. The system records financial datasubmitted by recipients and reflects the financial status ofthe award. The data base is updated on a continuing basis(at least once a month).

In addition to special reports and recurring reportssuch as month-end status reports, the system provides a querycapability and immediate access to information on a par-ticular award, group of awards or overall status of awards.

The system provides a wide spectrum of information—administrative, financial, and programmatic—to differentlevels of management. It assists management in monitoringworkload, pinpointing bottlenecks, speeding up the resolutionof specific problems, closing out grants on a timely basisand responding quickly to external information requests.

Examples of some of the reports produced are presentedin the following paragraphs.

Status of Grant Application Process

Each month a cumulative report is generated to show thestatus of grant application processing. The report containsfor each program office the number of receipts, rejections,budget review requests, budget review completions, financialclearance completions, certifications by financial activitieswithin the Office of the Comptroller, program office certifi-cations and award signatures. The number of applicationscurrently in process is also indicated for comparison pur-poses. An abbreviated version of this report is presented inIllustration E-l (page 42).

Within this report, a narrative analysis made by theOffice of Planning and Management explains any adverseconditions, poor practices and bottlenecks, both in-house oron the part of applicants. For example, a significant

39 -

increase in application rejections may identify a need foradequate preapplication assistance, more information, orproper understanding by applicants as to the importance ofapplication deadline.

One example of an in-house condition may be delay inapplication review by program offices or the finance office.The report highlights not only the problem, but also gives anexplanation of why the problem occurred. The narrative, fromtime to time, recommends alternatives for corrective actions

with support and justification.

Using the same data base, other special reports can beand are prepared. For example, Illustration E-2 (page 43),provides the status of grant applications that have been inprocess over 90 days. A narrative accompanying the reportexplains the reasons for the delays and compares the statis-ties with previous periods.

Status of Grantees FinancialReporting and Performance

Financial Status Reports indicating outlays, obligationsand unobligated balances are required to be submitted bygrantees within 45 days after the end of each calendarquarter. The automated information system monitors thereceipt of the Financial Status Reports from grantees. Asshown in Illustration E-3 (page 44), the report indicatesthe number of Financial Status Reports due and received andthe rate of grantees' delinquency for each program office.Furthermore, the system automatically generates a letterinforming each grantee of its delinquency. With this system,the Agency has reduced substantially the number of delinquentreports.

Financial data from the Financial Status Reportsand agency internal transactions are entered into theautomated system and used to generate for each grant or

group of grants, reports showing the award amount, paymentto the grantees, payment by the grantees, grantees' unpaidobligations and unused funds as shown in Illustration E-4(page 45). In addition to the financial status of eachgrant, information from this report can alert management topotential cash management problems of the grantees includingexcessive Federal cash on hand.

Another report compares a grantee's total outlay amount

as reported on the Financial Status Report with the amount of

40 -

cash drawdown by letter of credit as shown in IllustrationE-5 (page 46). A significant variance in the two amounts mayindicate the need for a review of the grantee's cash flow andcash management.

Status of Grants Awaiting Close-Out Action

After the grant period has expired or work has beencompleted, grants need to be closed as soon as possible inorder to ensure that both the grantee's and the Agency'sresponsibilities to each other have been fully met. Theautomated system tracks the completed grants until they aresent to storage. Illustration E-6 (page 47) is a report thatidentifies the status of grants with completion dates over180 days old which are awaiting close-out action within eachprogram office. A narrative can be provided to analyze thebacklog and compare figures with prior periods.


Larry E. Kruhm (202) 724-7594Office of Justice Assistance, Research and

Statistics633 Indiana Avenue NWRoom 900, Management Systems BranchWashington, DC 20531

41 -

ILLUSTRATION E-l ILLUSTRATION E-l

OFFICE OF JUSTICE ASSISTANCE, RESEARCH AND STATISTICSSTATUS OF GRANT APPLICATION PROCESS

SEPTEMBER 30, 1979

OFFICE

A

B

c

D

E

F

TOTAL

PROGRAM OFFICE

RECEIVED

183

729

51

145

113

130

1,351

REJECTED

101

334

0

93

26

19

573

IN PROCESS

55

257

5

39

35

19

410

FlNANCiAL'^EVIEW

REQUESTED

118

337

42

96

99

122

814

COMPLETED

110

329

41

100

99

118

797

GRANTSAPPROVED

71

299

39

100

99

112

720

NARRATIVE ANALYSIS

A large amount of application rejection was due to ". . . . . ."A total of 814 financial reviews were requested. It is interesting tonote that 90 percent of the applications given a financial review iseventually approved for award. This means that financial reviews arebeing requested primarily on applications that are programmaticallysound. However, program offices are taking a longer time to performtheir initial review and this increases the chance that an applicationwill be in process for more than 90 days.

42 -

ILLUSTRATION E-2 ILLUSTRATION NO. E-2

OFFICE OF JUSTICE ASSISTANCE, RESEARCH AND STATISTICSGRANT APPLICATIONS ON HAND OVER 90 DAYS

SEPTEMBER 30, 1979

PROGRAMOFFICE

A

B

c

D

E

F

TOTAL

UNDERGOINGPROGRAM OFFICE

REVIEW

9

1

0

6

6

1

23

UNDERGOINGFINANCIAL

REVIEW

5

0

0

1

0

1

7

IN FINM7APPROVAL& AWARD

PROCESSING

0

1

0

1

1

1

4

TOTAL

14

2

0

8

7

3

34

NARRATIVE ANALYSIS

This is the lowest number of applications in processfor over 90 days during the entire fiscal year. At present,8 percent of the applications are in process over 90 days.No significant problems exist.

43 -

ILLUSTRATION E-3 ILLUSTRATION E-3

OFFICE OF JUSTICE ASSISTANCE, RESEARCH AND STATISTICSRECEIPT OF GRANTEES' FINANCIAL STATUS REPORTS (FSR)

FOR SECOND QUARTER, FY 1980

PROGRAMOFFICE

A

B

c

D

E

F

TOTAL

NO. OFFSR DUE

110

101

70

166

60

177

684

NO. OF FSRRECEIVED

110

101

68

135

50

175

639

NO. OF FSRDELINQUENT

(OVER 45 DAYS)

—0—

-0-

2

31

10

2

45

RATE

0.0%

0.0%

2.9%

18.6%

16.7%

1.1%

6.6%

NARRATIVE ANALYSIS

Except for Offices D and E, the delinquent rate is downsubstantially this month. Offices D and E are stepping uptheir contacts with grantee officials to provide technicalassistance in improving the timeliness of the FSR sub-missions.

44 -


OFFICE OF JUSTICE ASSISTANCE, RESEARCH AND STATISTICSANALYSIS OF GRANT FINANCIAL STATUS REPORT

(IN THOUSANDS)APRIL 4, 1980

GRANTNO.

76AB11

76AS42

76EF71

77JJ12

77JJ17

77PB04

78AA11

78AS01

78DFOO

79AS21

79AF22

79DFOO

-AGENCY-

AMOUNTOF

AWARD

$ 82

50

15

22

75

19

4

20

14

21

12

10

RECORD

AMOUNTPAID

$ 82

50

15

22

75

19

4

20

10

20

6

5

GRANTEE

OUTLAYS

$ 50

47

10

20

55

16

3

20

7

10

5

5

•S FINANCIAL

UNPAIDOBLIGATION

$31

2

5

2

2

2

1

-0-

2

8

1

0

STATUS REPORT

UNOBLIGATEDBALANCE

$ 1

1

-0-

-0-

18

1

-0-

-o-

5

3

6

5

ITEMREQUIRINGFOLLOW UP

*

*

*

45 -


OFFICE CF JUSTICE ASSISTANCE, RESEARCH AND STATISTICSCASH FLOW REPORT OF

GRANTEES CM LETTER OF CREDIT(IN THOUSANDS)MAY 18, 1980

GRANTNO.

76AS10

76EF21

76DD51

77AB10

77DF10

77JS10

78AA10

78DF10

78PB10

79AB01

79PB10

79SS20

AMOUNTOF

AWARD

$100

200

475

22

70

81

10

25

41

410

1,200

90

CASH DRAWDOWN

LAST DATE

12-15-78

12-15-78

12-15-78

02-15-79

02-15-79

04-30-79

06-15-79

09-30-79

01-15-80

02-15-80

02-15-80

03-15-80

AMOUNT

$100

200

475

22

70

81

10

25

41

300

200

70

GRANTEE

LAST DATE

06-30-79

06-30-79

06-30-79

12-31-79

12-31-79

12-31-79

03-31-80

03-31-80

03-31-80

03-31-80

03-31-80

03-31-80

REPORT

OUTLAYS

$ 50

198

474

22

65

79

10

22

39

240

175

65

:ASH ONHAND

$ 50

2

1

-0-

5

2

-0-

3

2

60

25

5

ETEM FOR?OLLOW UP

*

*

*

*

*

*

*

46


OFFICE OF JUSTICE ADMINISTRATION, RESEARCH AND STATISTICSCATEGORICAL GRANTS AWAITING CLOSE-OUT ACTION

WITH END DATES OVER 180 DAYS OLDSEPTEMBER 30, 1979

PROGRAMOFFICE

A

B

c

D

E

F

TOTAL

^07UNDERGOING

PROGRAMOFFICE REVIEW

18

202

12

129

37

64

462

NO.UNDERGOINGFINANCIAL

REVIEW

4

33

2

15

22

13

89

TOTAL

22

235

14

144

59

77

551

% OFAGENCY

4

43

2

26

11

14

100

NARRATIVE ANALASIS

Although the backlog of grants awaiting close-out reviewhas decreased by one-half since the beginning of FY 1979,additional effort is needed in Offices B, D, E, and F.

47 -ri-U.S. GOVERNMENT PBINTING OFPICE: 1980- 620-386/282

managers—are you looking for more—adequate financial information needed in managing operations...

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