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Working Capital Fund Experience
U.S. Department of Transportation
The DOT's Working Capital Fund (WCF) was organized under the Transportation Administrative Service Center (TASC). EMA began its support of the DOT's WCF under a contract to TASC. As a result of a reorganization within the DOT, TASC operations were split between two offices within the DOT Office of the Secretary (OST): The Office of the Chief Information Officer (OCIO) provides IT-related services, such as desktop services, server operations, telecommunications, IT security, networking, and continuity of operations. The Office of the Associate Administrator for Administration provides non-IT related services, such as human resources, facilities, physical security, and procurement. EMA supports both of these offices under separate contracts. The following sections describe EMA's experience with the DOT's Working Capital Fund.
Office of the Secretary of Transportation, Office of the Chief Information Officer
Transportation Administrative Service Center
For more than 16 years, EMA supported all financial and procurement operations for the DOT's Working Capital Fund (WCF) IT programs. EMA’s responsibilities as part of this contract include the following:
- EMA facilitated the transition of the Transportation Administrative Service Center (TASC) to the DOT's Office of the Secretary (OST), Office of the Chief Information Officer (OCIO) by preparing detailed financial briefings for the OCIO management team to show the financial status of each IT program and the impacts of the transition to each program.
- EMA developed budget formulation and execution schedules, prepared input documentation, prepared and distributed budget estimates and forecasts, tracked budget ceilings, responded to audit requests, prepared revenue and expense forecasts, and performed other budgetary and financial support activities.
- EMA monitored vendor invoices and other expenses against obligations, by cost center and cost category, to prevent cost overruns and to ensure compliance with contract funding ceilings. Througout all our years of WCF support, EMA never experienced a cost over-run and consistently met or exceeded target budget margins.
- EMA developed sophisticated cost and pricing models as a basis for product and service pricing.
- EMA assessed the impact of future business opportunities and prepared cost proposals and customer agreements.
- EMA prepared procurement documents, submited them to authorizing officials for approvals, and coordinated with the OST Office of Acquisitions through contract award.
Tracked contract activities against performance targets in automated systems developed by EMA IT specialists.
- EMA integrated billing, procurement, vendor invoice, and budget formulation and execution activities into a sophisticated fee-for-service financial management system. This system used Microsoft .NET platform for web and desktop forms and reporting, with Oracle as the back-end database. As an example of the level of detail in this system, we aggregated over 100,000 billing transactions each month into a series of worksheets for upload into the DOT's accounting system (Oracle Financials). Our customer statements provided detailed billing backup for each service and product producing a customer charge. Services included desktops, servers, web sites, databases, IT Security, telephones, PDAs, cell phones, pagers, special services (time and materials labor), and special customer purchases.
- EMA developed a web-based customer reporting tool that enabled customers to extract reports (pdf and MS Excel) each month as soon as each period closed. Customers were able to pull detail reports for telecommunications and desktop service requests, employee detail charges, and summary reports by organization and division.
- EMA developed a Service Order Management module in Remedy that enabled us to coordinate moves, adds, and changes performed by the Service Desk(s) with billing activities. It also enabled customers to manage their own IT services, including the assignment of staff to specific billing codes.
- EMA developed cost estimates and financial reports for customer special projects.
Prior to being reorganized under the DOT Office of the Secretary, the DOT's Working Capital Fund was organized under the Transportation Administrative Service Center (TASC). TASC maintained all WCF programs for the DOT, including both IT and administrative operations. EMA provided support to all TASC IT programs within the Information Technology Operations (ITO) practice. EMA supported 12 major IT service provider programs, including Desktop Services, Server Operations, Enterprise Network Operations Center, Telecommunications Operations, Inter-modal Data Network, IT Security, and several internal support programs.
- EMA provided a broad range of managerial accounting services to all of these programs, including the following:
- EMA supported the budget formulation and execution processes. EMA's primary responsibility was to ensure recovery of all costs within a 2% margin. EMA regularly met or exceeded this target.
- EMA established procedures for billing, procurement, and vendor payment that improved accuracy and customer confidence in WCF financial programs.
- EMA filed and distributed award documents, and entered award information into the Contract Information System (CIS) for all WCF IT procurement actions, including contracts, purchase order, credit card orders, and BPAs.
- EMA developed cost allocation methodologies for several WCF IT programs to fairly allocate the costs of those services across all DOT operating administrations.
- EMA developed an activity-based costing (ABC) cost model that served as a basis for key pricing realignment within the Telecom Operations program. EMA was able to show where there were imbalances between cost and revenue, and was able to adjust pricing to ensure complete cost recovery for TOPS services.
- EMA recovered more than $3M in additional revenue, streamlined operations, and increased accuracy in all areas of procurement and financial reporting.
- EMA developed information systems to track and report critical milestones and financial data.
- EMA replaced a manual telecom report distribution system with an automated e-mail based system that reduced the time to process monthly billing reports from 2 weeks to 1 hour, reduced a 45,000 page report to 500 pages, eliminated the need for 12 boxes of copy paper, and eliminated the labor to photocopy, collate, and manually distribute the reports through the DOT and USPS mail systems.
- Using automated systems, EMA reduced the time to process procurements, vendor invoices, and customer billing statements, improved management's ability to track the status of related actions, and increased the accuracy, detail, and timeliness of related financial reports.
- EMA prepared cost estimates for customers and developed detailed cost models for WCF IT products and services.
- EMA monitored vendor invoices and other expenses against WCF obligations to prevent cost overruns and to ensure compliance with contract funding ceilings.
- EMA prepared, filed, and distributed all ITO procurement documents.
- EMA entered award information into the DOT Contract Information System (CIS).
- EMA tracked all activities against performance targets in Oracle databases developed by EMA IT specialists.
- EMA conducted an analysis of accounting operations, which led to recommendations for implementation of new information systems and accounting procedures in accordance with applicable federal regulations. EMA’s responsibilities on this contract included the following:
- Developed activity-based cost models and implemented activity-based cost systems to determine true product costs for this fee-for-service organization.
- Implemented internal controls and procedures, documented them in a financial management standard operating procedures manual and trained all staff performing related duties.
Office of the Secretary (OST), Office of Financial Management
EMA provided a variety of financial management and managerial accounting support to the Office of the Secretary (OST), Office of the Associate Administrator for Administration, Office of Financial Management (OFM), which provides non-IT Working Capital Fund services to the DOT's Operating Administrations. EMA’s responsibilities and accomplishments included the following:
- EMA recovered over 90% of $6.5M from "suspense accounts" resulting from customer "charge-backs" (billings not accepted by customers). In many cases,EMA staff had to complete rebuild billing histories, including procurements, customer agreements, reimbursable agreements, MIPRs, financial statements, and US Treasury reports, in order to prepare the business cases for recovery of these funds. In some cases, programs had been closed or were in final contract closeout. In other cases, customers had de-obligated funds associated with the original programs. EMA senior financial staff prepared documentation to show that the DOT had provided the services to the customer, the customer had accepted the services, DOT had paid the vendor, and DOT had properly billed the customer. We worked with DOT's financial and legal team to prepare the legal package that accompanied each re-issued customer billing.
- EMA was brought in to organize and maintain the budget for the DOT's New Headquarters Building project, a highly visible project under intense public and congressional scrutiny. Our senior staff were able to quickly organize the multi-year, multi-agency funding, restoring order and confidence for this significant project.
- EMA provided a broad range of managerial accounting support to several Working Capital Fund programs within the OST Office of the Associate Administrator for Administration, including the Office of Acquisitions, the Office of Facilities, and the Office of Transit Benefits. For these customers, we supporedt procurement, budget formulation/execution, customer billing, and vendor payments.