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Budget Formulation and Execution Line of Business

• Part I: Summary Information and Justification
  • Section A: Overview
  • Section B: Summary of Spending
  • Section D: Performance Information
  • Section F: Enterprise Architecture (EA)
• Part IV: Planning For "Multi-Agency Collaboration" ONLY
• Section A: Multi-Agency Collaboration Oversight
• Section B: Risk Management
• Section C: Cost and Schedule Performance

1. Date of submission: Sep 8, 2008
2. Agency: 018
3. Bureau: 18
4. Name of this Capital Asset: Budget Formulation and Execution Line of Business
5. Unique Project (Investment) Identifier: 018-18-01-01-01-3200-24
6. What kind of investment will this be in FY2010? Multi-Agency Collaboration
7. What was the first budget year this investment was submitted to OMB? FY2008
8. Provide a brief summary and justification for this investment, including a brief description of how this closes in part or in whole an identified agency performance gap: Currently, most agencies do not have automated systems to support their budget formulation and execution activities; they depend on basic office software to prepare and justify complex, multi-billion dollar budgets. Hundreds of budget exercises are conducted annually without the benefit of electronic collaborative technologies. Agency budget personnel spend substantial time entering, reconciling, and merging data into textual presentations. Federal budgeting is a policy-driven process. The goal of BFELoB is to enable agency and OMB budget personnel to reduce manual processes, improve efficiency and effectiveness, and redirect limited resources to a backlog of high priority analytical activities without compromising requirements or the flexibility of policy officials. Due to significant variability in agency size, activities, organizational complexity, and congressional constituencies, solutions based on standardizing business processes and workflows are impractical for most budgeting activities. Instead, LoB solutions will enhance Federal budgeting capabilities by: creating a community of practice for the Federal budgeting profession, identifying and hosting training and education, establishing a venue for sharing best practices, assisting agencies in implementing appropriate automation, improving tools for government-wide budget exercises and collaboration, consolidating procurements, integrating budget and finance, and establishing standards for data and data exchange. Only a portion of LoB solutions, approximately one-third, are IT based. The LoB governance is based on a "value proposition" in which a voluntary consortium of agencies under the auspices of the Budget Officers Advisory Council contribute funding to the LoB in order to gain the government-wide benefits the LoB provides. If the funding collected is insufficient and alternate resources are unavailable, the proposed solutions will be deferred or scaled back as determined by the contributing agencies. To date the LoB has: established an online Community page for agency collaboration; made available online meeting capabilities; made available the first 'fee for service' budget formulation and execution (BFE) system from Treasury; developed a Decision Matrix to assist agencies in evaluating the best system for their agencies; hosted budget/finance-related training sessions; and coordinated collaboration and integration between the Budget and Financial Management communities.
9. Did the Agency's Executive/Investment Committee approve this request? yes
   1. If "yes," what was the date of this approval? Jun 18, 2008
10. Did the Project Manager review this Exhibit? yes
11. Contact information of Program/Project Manager?

1. What is the current FAC-P/PM (for civilian agencies) or DAWIA (for defense agencies) certification level of the program/project manager? Waiver Issued
12. Has the agency developed and/or promoted cost effective, energy efficient and environmentally sustainable techniques or practices for this project. no
    1. Will this investment include electronic assets (including computers)? yes
    2. Is this investment for new construction or major retrofit of a Federal building or facility? (answer applicable to non-IT assets only) no
       1. If "yes," is an ESPC or UESC being used to help fund this investment? [Not answered]
       2. If "yes," will this investment meet sustainable design principles? [Not answered]
       3. If "yes," is it designed to be 30% more energy efficient than relevant code? [Not answered]
13. Does this investment directly support one of the PMA initiatives? yes
    Financial Performance
    Budget Performance Integration
    Expanded E-Government
    Human Capital
    1. Briefly and specifically describe for each selected how this asset directly supports the identified initiative(s)? BFELoB supports Expanded E-Govt by working for productivity & performance gains via automation (example, new fee-for-service and information sharing on the Budget Community page). For Human Capital, BFELoB is updating core competencies, developing strategies for recruitment/retention, & providing training. For Financial Performance, BFELoB collaborates with the FMLoB/FSIO to promote data accuracy & consistency. BFELoB coordinates with the PII Council to align automation with goals for BPI.
14. Does this investment support a program assessed using the Program Assessment Rating Tool (PART)? (For more information about the PART, visit www.whitehouse.gov/omb/part.) no
    1. If "yes," does this investment address a weakness found during a PART review? [Not answered]
    2. If "yes," what is the name of the PARTed program? [Not answered]
    3. If "yes," what rating did the PART receive? [Not answered]
15. Is this investment for information technology? yes

For information technology investments only:

16. What is the level of the IT Project? (per CIO Council PM Guidance) Level 3
17. In addition to the answer in 11(a), what project management qualifications does the Project Manager have? (per CIO Council PM Guidance) (2) Project manager qualification is under review for this investment
18. Is this investment or any project(s) within this investment identified as "high risk" on the Q4-FY 2008 agency high risk report (per OMB Memorandum M-05-23)? yes
19. Is this a financial management system? no
    1. If "yes," does this investment address a FFMIA compliance area? [Not answered]
       1. If "yes," which compliance area: [Not answered]
       2. If "no," what does it address? [Not answered]
    2. If "yes," please identify the system name(s) and system acronym(s) as reported in the most recent financial systems inventory update required by Circular A-11 section 52 [Not answered]
20. What is the percentage breakout for the total FY2010 funding request for the following?

21. If this project produces information dissemination products for the public, are these products published to the Internet in conformance with OMB Memorandum 05-04 and included in your agency inventory, schedules and priorities? n/a
22. Contact information of individual responsible for privacy related questions:

23. Are the records produced by this investment appropriately scheduled with the National Archives and Records Administration's approval? yes
24. Does this investment directly support one of the GAO High Risk Areas? no

2. Will this project require the agency to hire additional FTE's? yes
   1. If "yes", How many and in what year? ED currently staffs the BFELoB PMO with 4 staff members. OMB/BSB staff also assist with management functions. In addition, many partner agency volunteers assist with workgroup leadership and other activities. Additional FTE may be hired in FY2010 and beyond.
3. If the summary of spending has changed from the FY2009 President's budget request, briefly explain those changes: The BFELoB program is an official e-gov Line of Business initiative for which the Department of Education serves as the Managing Partner. Overall, the SoS (including Govt FTE) increased by $1.95M from last year's submission. This increase includes a slight increase of .1 in 2009 due to additional O&M, The Govt FTE cost increase reflects increase in staffing numbers to reflect consistent staffing at 4 FTE for the program from 2008 forward. The Govt FTE costs also include inflationary increases. Govt FTE are expected at a steady rate of 4 FTE from 2008 forward. In addition, due to the nature of the LoB, the split between Planning and Acquisition versus O&M has been adjusted in 2007-2010. It is anticipated that BFELoB will be strictly O&M in 2011 and beyond. BFELoB accepts "in-kind" donations for completion of BFELoB work products by participating agencies. This type of participation is hard to predict. "In-kind" staff donations are included in the 2007 and 2008 costs, but are not in the Govt FTE costs for 2009 and beyond. It is also important to note that the life-cycle costs depicted in the Summary of Spending DO NOT include $34.75 million in O&M costs shown for the selected alternative in the Analysis of Alternatives section of this Exhibit. These costs are included in each of the alternatives analyzed to estimate the additional costs to agencies from adopting and maintaining BFELoB tools. The BFELoB included these costs in the analysis of alternatives to develop a comprehensive, full-faith estimate of true life-cycle costs across the federal government for the BFELoB initiative. However, these costs are excluded from the Summary of Spending because this table represents the BFELoB program budget, as approved by member agencies, and therefore only represents those life-cycle costs borne by the program. Total life-cycle costs in the Summary of Spending including Government FTEs ($25.295M) less prior year sunk costs of $2.31 million equal $22.98 million in life-cycle costs. This value plus the additional $34.75 million in estimated agency-level O&M costs from future implementation of BFELoB solutions, equals $57.7 million life-cycle costs as shown in the Analysis of Alternatives.

1. Is this investment included in your agency's target enterprise architecture? no
   1. If "no," please explain why? [Not answered]
2. Is this investment included in the agency's EA Transition Strategy? no
   1. If "yes," provide the investment name as identified in the Transition Strategy provided in the agency's most recent annual EA Assessment. [Not answered]
   2. If "no," please explain why? As the Budget Formulation and Execution Line of Business is an eGov initiative, it is incorporated in the Federal Enterprise Architecture (FEA) and covered under the FEA's transition strategy.
3. Is this investment identified in a completed and approved segment architecture? no
   1. If "yes," provide the six digit code corresponding to the agency segment architecture. The segment architecture codes are maintained by the agency Chief Architect. For detailed guidance regarding segment architecture codes, please refer to http://www.egov.gov/. 304-000

6. Will the application leverage existing components and/or applications across the Government (i.e., USA.Gov, Pay.Gov, etc)? yes
   1. If "yes," please describe. The BFELoB Target Technology Architecture and identification of eGovernment shared services will be developed as the business functions, capabilities, and service components of the LoB are further defined. The LoB will utilize the Federal Transition Framework as a tool for identifying cross-government components.

4. Did you conduct an alternatives analysis for this investment? yes
   1. If "yes," what is the date of the analysis? Jul 21, 2008
   2. If "no," what is the anticipated date this analysis will be completed? [Not answered]
   3. If no analysis is planned, please briefly explain why: [Not answered]

6. Which alternative was selected by the Initiative Governance process and why was it chosen? The Task Force chose alternative 3 (Phased Implementation) because it shows the greatest rate of return and least risk to implement. Each alternative to the status quo recognizes cost avoidances to participating agencies as the only tangible benefits from the BFELoB initiative. Cost avoidances are realized due to activities individual agencies would no longer need to undertake due to the support tools and services the BFELoB program develops, delivers and maintains. Alternative 2 (Ad-Hoc Expansion) only delivers support tools and services in a limited number of areas including: agency specific collaboration tools, budget tools, analysis tools and document production. Alternative 3 expands these areas to include data tracking and analysis tools and human resources and electronic data transfer to the OMB MAX website. Alternative 4 (Accelerated Implementation) accelerates the delivery of the benefits realized in Alternative 3 such that 100% benefits are realized a full year earlier. Alternative 3 delivers cost avoidance benefits nearly equivalent to those of Alternative 4, but relies on a more gradual and realistic funding strategy which ultimately results in lower life-cycle costs. In comparison, Alternative 2 is more costly, by roughly $12.9 Million, because federal agencies incur individual and duplicate acquisition and implementation costs to implement the needed tools and services. As the approach is ad-hoc, this alternative does not yield standard approaches and tools for the BFE community and duplicates resources. It has the lowest rate of return of all the alternatives. In comparison to Alternative 3, Alternative 4 realizes more benefits because they are realized a full year earlier. However, the funding required to support this benefit stream is not realistic and exceeds the ability of participating agencies to support it. The Task Force chose alternative 3 because it delivers a high benefit stream at initial costs that better reflect agency budget realities; it represents lower risk since a more gradual implementation schedule keeps activities at a manageable size for staff. This analysis captures an additional $34.75 million in O&M costs than represented in the Summary of Spending to incorporate implementation costs of participating agencies from BFELoB solutions. Though an economic cost, they are not BFELoB program costs and not shown in the Summary of Spending or Partner Agency funding value. Life-cycle costs equal $22.98M without these costs.
7. What specific qualitative benefits will be realized? Improved efficiency and effectiveness of agency and central processes for formulating and executing the Federal Budget, including reduced errors, increased responsiveness to policy needs, and the ability to address a broader range of issues during peak work periods. Enhanced effectiveness and productivity of the Federal budgeting workforce, including reduced turnover and raised morale. Improved effectiveness and accuracy of agency budget data collection processes (e.g. the validation of data using up to date A-11 Business rules and electronic submission to OMB's MAX system). Improved capabilities for analyzing formulation, execution, planning, performance, and financial information in support of decision making. A governance process that establishes standards and guidelines essential for interoperability. Improved integration and standardized exchange of budget formulation, execution, planning, performance measurement, and financial management information and activities across government. Enhanced capabilities for aligning programs and their outputs and outcomes with budget levels and actual costs to institutionalize Budget and Performance Integration.

9. Will the selected alternative replace a legacy system in-part or in-whole? no
   1. If "yes," are the migration costs associated with the migration to the selected alternative included in this investment, the legacy investment, or in a separate migration investment? [Not answered]
   2. If "yes," please provide the following information:

1. Does the investment have a Risk Management Plan? yes
   1. If "yes," what is the date of the plan? Aug 25, 2008
   2. Has the Risk Management Plan been significantly changed since last year's submission to OMB? yes
   3. If "yes," describe any significant changes: The main change as been with respect to availability of resources and funding. Some of the resources are "in-kind" federal government resources and the availabilty of these resources depend on other priorities within their home agency. Funding is dependent on agency contributions which may change as well based on competing internal priorites that agencies may have.
2. If there currently is no plan, will a plan be developed? [Not answered]
   1. If "yes," what is the planned completion date? [Not answered]
   2. If "no," what is the strategy for managing the risks? [Not answered]

1. Are you using EVM to manage this investment? yes
   1. If "yes," does the earned value management system meet the criteria in ANSI/EIA Standard - 748? yes
   2. If "no," explain plans to implement EVM: [Not answered]
   3. If "N/A," please provide date operational analysis was conducted and a brief summary of the results: [Not answered]
2. Is the CV% or SV% greater than ± 10%? (CV%= CV/EV x 100; SV%= SV/PV x 100) yes
   1. If "yes," was it the? SV
   2. If "yes," explain the causes of the variance: Schedule variance was caused by the late receipt of funds from partner agencies. This resulted in a late start on most projects.
   3. If "yes," describe the corrective actions BFELoB rebaselined to reflect the receipt of funds later in the FY (generally in April or May, rather than October). This is also reflected in the outyear information.
3. Has the investment re-baselined during the past fiscal year? yes
   1. If "yes," when was it approved by the agency head? May 22, 2008

Return to OMB Exhibit 300 page