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Compliance T his section of the report provides the
required information on the Department’s
compliance with the following legal and
regulatory requirements:
with Legal and u Federal Managers’ Financial Integrity Act
Regulatory u Federal Financial Management
Requirements
Improvement Act
u Inspector General Act Amendments
u Federal Information Security Management Act
u Other key legal and regulatory requirements
including the following:
n Prompt Payment Act
n Debt Collection Improvement Act
In addition, this section includes summaries of the
Department’s financial management improvement
initiatives regarding:
u Audited financial statement results
u Major management challenges facing Interior
u Financial management systems
u Financial management human capital
u Financial data stewardship
Federal Managers’
Financial Integrity Act
The Department believes that maintaining integrity
and accountability in all programs and operations:
(1) is critical for good government; (2) demonstrates
responsible stewardship over assets and resources;
(3) ensures high-quality, responsible leadership;
(4) ensures the effective delivery of services to
customers; and (5) maximizes desired program
outcomes. Interior has developed and implemented
management, administrative, and financial system
controls that reasonably ensure:
u Programs and operations achieve intended
results efficiently and effectively;
86
Compliance with Legal and Regulatory Requirements
u Resources are used in accordance with the
mission; FY 2007 ASSURANCE STATEMENT
Interior’s management is responsible for
u Programs and resources are protected from establishing and maintaining effective internal
waste, fraud, and mismanagement; control and financial management systems that
meet the objectives and requirements of the
u Laws and regulations are followed; and Federal Managers’ Financial Integrity Act of
1982. Interior conducted its annual assessment
u Timely, accurate and reliable data are of the effectiveness of internal control over the
maintained and used for decision-making at effectiveness and efficiency of operations and
all levels. compliance with applicable laws and regulations
in accordance with the requirements of the Office
Interior’s internal control program is designed to of Management and Budget (OMB) Circular
ensure full compliance with the goals, objectives, No. A-123, Management’s Responsibility for Internal
and requirements of FMFIA and OMB Circular No. Control. Based on the results of this evaluation,
A-123, Management’s Responsibility for Internal Interior can provide reasonable assurance that its
Control, including Appendix A, Internal Control over internal control over the effectiveness and efficiency
Financial Reporting; OMB Circular No. A-127, of operations and compliance with applicable
Financial Management Systems, and OMB Circular laws and regulations as of September 30, 2007,
No. A-130, Management of Federal Information was operating effectively and that no material
Resources. weaknesses were found in the design or operation
of the internal controls.
Management Assurances
FMFIA requires agencies to provide an annual In addition, Interior conducted its assessment
statement of assurance regarding the effectiveness of the effectiveness of internal control over
of internal and accounting controls over financial financial reporting, which includes safeguarding of
systems. Agencies are also required to provide an assets and compliance with applicable laws and
assurance statement on management’s assessment regulations, in accordance with the requirements of
of the effectiveness of internal control over financial Appendix A of OMB Circular No. A-123. Based on
reporting as of June 30 each fiscal year. During the results of this evaluation, Interior can provide
FY 2007, the Office of Financial Management reasonable assurance that its internal control
conducted comprehensive site visits and otherwise over financial reporting as of June 30, 2007, was
provided oversight with regard to risk assessments, operating effectively and no material weaknesses
internal control reviews, assessments of internal were found in the design or operation of the internal
control over financial reporting, and progress in control over financial reporting. Further, subsequent
implementing audit recommendations. Interior’s testing through September 30, 2007, did not identify
FY 2007 Annual Assurance Statement is highlighted any reportable changes in key financial reporting
to the right. The basis for the assurance statement internal controls.
conclusions are discussed below.
Also, Interior can provide reasonable assurance
Internal Control Assessments that its financial systems substantially comply with
Interior conducts annual assessments of the the Federal Managers’ Financial Integrity Act and
effectiveness of management, administrative, and with the component requirements of the Federal
accounting systems controls in accordance with Financial Management Improvement Act.
FMFIA and OMB guidelines. The conclusions in
the Secretary’s FY 2007 Annual FMFIA Assurance
Statement are based on the results of 512 internal
control reviews of programs and administrative
functions conducted by bureaus and offices,
Dirk Kempthorne
including an assessment of internal control over
Secretary of the Interior
financial reporting; 48 Office of Inspector General November 13, 2007
program audits; 21 Government Accountability
87
Compliance with Legal and Regulatory Requirements
FIGURE 1-62
challenges and on components of the President’s
Management Agenda. Figure 1-63 presents a
crosswalk of those activities.
FMFIA Material Weaknesses and
Accounting System Nonconformances
OMB Circular No. A-123 requires that each agency
identify and report on material weaknesses affecting
the agency. Interior has adopted the OMB guidelines
for material weakness designations. These
guidelines are highlighted on the next page. Interior
recognizes the importance of correcting material
weaknesses in a timely manner. The Office of
Financial Management and senior program officials
continuously monitor corrective action progress
Office program audits; and the 9 financial statement for all material weaknesses. At the beginning of
audits conducted by the independent public FY 2007, Interior had no department-level FMFIA
accounting firm, KPMG LLP, under the auspices material weaknesses pending correction carried
of the Chief Financial Officers Act of 1990 and the forward from the previous year.
Government Management Reform Act of 1994
(see Figure 1-62). As in prior years, internal control The Department has a reporting practice consistent
reviews performed by the Department and its with the December 2004 revision to OMB Circulars
bureaus provided the majority of the support (86%) No. A-123 and No. A-136, Financial Reporting
for the Annual Assurance Statement. In addition, Requirements, to report only department-level
many of Interior’s internal control reviews and material weaknesses in the Performance and
related accountability and integrity program activities Accountability Report. Bureau-level material
focused on areas identified as major management weaknesses continue to be reported internally
FIGURE 1-63
Crosswalk of Activities Related to Major Management Challenges
President's
Interior's Major Management Challenges
Management Agenda
Responsibilities to Indian and Insular Affairs
Health, Safety, and Emergency Management
Strategic Management of Human Capital
Resource Protection and Restoration
Budget and Performance Integration
Procurement, Contracts, and Grants
Expanded Electronic Government
Improved Financial Management
Management Accountability and Integrity Program Activities in FY 2007
Related to Interior's Major Management Challenges
Maintenance of Facilities
and President's Management Agenda
Information Technology
Financial Management
Competitive Sourcing
Revenue Collections
Internal Control Reviews/Management Studies and Initiatives
OIG Audits
- Program Audits Completed
- Financial Statement Audits Completed
GAO Audits Completed
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Compliance with Legal and Regulatory Requirements
and are actively monitored by the bureau and the
Office of Financial Management for timely corrective Material Weakness Guidelines
action. The FMFIA material weakness, (Indian Trust
OMB and the Department define a material
Assets) shown in Figure 1-64, was downgraded
weakness as follows:
in FY 2006. Interior has no department FMFIA
material weaknesses to carry over to FY 2008 for t A control deficiency, or combination of
management’s reporting purposes. control deficiencies, that in management’s
judgment, should be communicated because
A summary of the Department’s financial they represent significant weaknesses in the
statement audit material weaknesses, FMFIA design or operation of internal control that
material weaknesses and accounting system could adversly affect the organization’s ability
nonconformances is presented in Figures 1-65 to meet its internal control objective which
and 1-66. the agency head determines to be significant
enough to report outside the agency.
Internal Control over Financial Reporting t A material weakness in financial reporting is a
Revised OMB Circular No. A-123, Appendix A, significant deficiency- i.e., one that adversely
strengthens internal control requirements over affects the ability to initiate, authorize, record,
financial reporting in Federal agencies. The revised process, or report financial data reliably
circular provides updated internal control standards and in accordance with Generally Accepted
and requirements for conducting management’s Accounting Principles - or a combination of
assessment of the effectiveness of internal controls significant deficiencies, that results in more
over financial reporting. than a remote likelihood that a material
misstatement of the financial statements will
not be prevented or detected.
In FY 2007, the Department completed its second
assessment of the effectiveness of internal The Department will report a material weakness
control over financial reporting. The results of the corrected or downgraded when the following
assessment revealed that adequate controls exist occurs:
and that financial reporting can be relied upon by
senior management when used in conjunction with t Senior management has demonstrated
its commitment to resolving the material
other decision-making processes. The assessment
weakness as evidenced by resource
did not disclose any material weaknesses in the deployment and frequent and regular
Department’s financial reporting activities. Although monitoring of corrective action progress;
deficiencies were found in some financial reporting
business processes, corrective actions are expected t Substantial and timely documented progress
to correct the deficiencies. The Department’s in completing material weakness corrective
internal controls over financial reporting reasonably actions is provided;
ensure the safeguarding of assets from waste, loss,
t Corrective actions have been substantially
and unauthorized use or misappropriation, as well completed, the remaining actions are minor in
as reasonably ensure compliance with laws and scope, and the actions will be completed within
regulations pertaining to financial reporting (See the next fiscal year;
FY 2007 Assurance Statement, paragraph 2).
t Implemented corrective actions have
Departmental policy-makers and program managers eliminated or minimized the root cause(s) of
continuously seek ways to achieve missions, meet the material weakness; and
program goals and measures, enhance operational t Substantial validation of corrective action
processes, and implement new technological effectiveness has been performed.
developments. The OMB requirement to assess
control over financial reporting strengthens
accountability of Departmental managers regarding
internal controls and improves the quality and
reliability of the Department’s financial information.
89
Compliance with Legal and Regulatory Requirements
FIGURE 1-64
FMFIA Material Weaknesses Previously Downgraded
FY 2006
PAR
Description Corrective Actions FY 2007 Progress Status
Target
Date
Bureaus: Departmental trust policies, Indian Affairs - has: (1) closed 9,400 probate FY 2008 Interior
IA/OST/OS/OHTA procedures, systems and internal cases; (2) assisted the Department’s downgraded
control will continue to be improved regulatory initiative team in drafting to Significant
First Reported: FY 1991 and training provided to achieve the regulations for probate, owner managed Deficiency in
goals of the Comprehensive Trust leasing, consolidation by sale, and ownership 2006.
Indian Trust Assets: The Management Plan. information; (3) deployed Trust Asset and
Office of the Special Trustee Accounting Management System and data Downgrade
for American Indians’ conversion at 45 agency field offices in 12 validated by
conversion to a commercial regions; (4) published program procedural financial
trust fund accounting system handbooks for the Trust land and natural statement
and the implementation of resource management programs; and (5) auditors in
enhanced OST management issued policies on Life Estates/Dowers, 2007.
controls ensure that all Witnesses, Timber Sales, Minerals, and
collected trust funds are Rounding.
properly accounted for. The
remaining items to correct this OHTA has completed to date, historical
material weakness includes: accounting that supports several significant
Office of Historical Trust conclusions: (1) a very high percentage of
Accounting’s historical records exist and can be located; (2)
accounting; strengthening the differences between supporting records and
existing system of controls to recorded transactions are few in number,
ensure that Indian Affairs small in size, and not systemic; (3) there is
ownership and distribution no evidence historical records have been
information is correct. altered; and (4) there is ample evidence that
monies collected were distributed to the
correct recipients.
The Office of the Secretary coordinated
efforts with IA, OHTA, and OST to assess the
Trust weaknesses identified as potential
findings in subsequent audit reports.
OST completed the implementation of a
centralized commercial lockbox process that
was initiated in FY 2005; this process
included policies, procedures and training.
OST Regional Trust Administrators are taking
the lead in concert with Bureau of Indian
Affairs regional directors to oversee the
leasing module conversions to the TAAMS.
Regarding these conversions 100% of
recurring Individual Indian Monies income
and 100% of IIM accounts were converted to
the leasing module of the TAAMS.
Beneficiaries serviced by the various
agencies that have been converted to the
leasing module for TAAMS are receiving
quarterly performance statements that
provide information regarding source of
funds, encumbrance information (who is
leasing their property, duration and payment
terms of lease), and a listing of the trust
property they own.
Federal Financial Management the Governmentwide U.S. Government Standard
Improvement Act General Ledger; and, 3) Federal financial
management system requirements that support full
FFMIA builds upon and complements the CFO disclosure of Federal financial data, including the
Act, Government Performance and Results Act, cost of Federal programs and activities.
and Government Management Reform Act. FFMIA
requires that Federal agencies substantially comply Federal agencies are required to address
with: 1) applicable Federal accounting standards; 2) compliance with the requirements of FFMIA in
90
Compliance with Legal and Regulatory Requirements
the representation letter to the financial statement overseeing the implementation, documenting and
auditor. The auditor is required to report on the closing of audit recommendations; and monitoring
agency’s compliance with FFMIA requirements the recovery of disallowed costs.
in the Independent Auditors’ Report. If an agency
is not in compliance with the requirements of the Departmental Goal for Timely
FFMIA, the agency head is required to establish a Implementation of Audit Recommendations
remediation plan to achieve substantial compliance. To further underscore the importance of
timely implementation of OIG and GAO audit
Although the FY 2007 Department financial recommendations, Interior has established an
statement audit report did identify a deficiency aggressive performance goal to implement 85%
concerning noncompliance with the Single Audit Act of all GAO and OIG recommendations where
Amendments of 1996 and OMB Circular No. A-133, implementation was scheduled to occur during
the Department substantially complies with the the year or in previous years. Financial audit
FMFIA and FFMIA. recommendations issued in FY 2007 were also
included in the goal base.
Inspector General Act Amendments In FY 2007, Interior exceeded its performance
(Audit Follow-up) goal with a composite implementation rate of 89%
(Figure 1-67). Interior’s success in achieving the
Interior believes that the timely implementation performance goal for the fifth consecutive year
of OIG and Government Accountability Office was due primarily to DOI’s aggressive monitoring
audit recommendations is essential to improving process. Monthly and quarterly scorecards on status
efficiency and effectiveness in its programs and of program internal control reviews and of audit
operations, as well as to achieving integrity and recommendation implementation were prepared for
accountability goals. As a result, DOI has instituted each bureau and office to ensure commitments are
a comprehensive audit follow-up program to ensure being met, and that senior management attention
that audit recommendations are implemented in a was directed immediately to slippage when it
timely and cost-effective manner and that disallowed occurred. This same progress monitoring will
costs and other funds due from contractors and continue in FY 2008 to ensure achievement of next
grantees are collected or offset. In FY 2007, Interior year’s performance goal.
monitored a substantial number of new Single
Audit (293), OIG (67), and GAO (52) audit reports. Audits Performed Under the Single Audit Act
Audit follow-up actions include analyzing audit Interior provides over $2 billion each year in funding
reports referred; advising grantors of single audit for: grants, cooperative agreements, Indian self-
findings; tracking, reviewing, and validating program determination contracts, and self-governance
and financial audit recommendations; developing compacts to state and local governments; Indian
mutually acceptable and timely resolution of tribes, colleges and universities; and other not-for-
disputed audit findings and recommendations; profit organizations. Under the provisions of the
FIGURE 1-65
Summary of FY 2007 Financial Statement Audit
Audit Opinion Unqualified
Restatement No
Beginning
Material Weaknesses New Resolved Consolidated Ending Balance
Balance
Control over Trust Funds 1
1 0 0 0
(IA, OST, & DO) (Downgraded)
Total Material Weaknesses 1 0 1 0 0
91
Compliance with Legal and Regulatory Requirements
FIGURE 1-66
Effectiveness of Internal Control over Financial Reporting (FMFIA § 2)
Statement of Assurance Unqualified
Beginning Ending
Material Weaknesses New Resolved Consolidated Reassessed
Balance Balance
Total Material Weaknesses 0 0 0 0 0 0
Effectiveness of Internal Control over Operations (FMFIA § 2)
Statement of Assurance Unqualified
Beginning Ending
Material Weaknesses New Resolved Consolidated Reassessed
Balance Balance
Total Material Weaknesses 0 0 0 0 0 0
Conformance with Financial Management System Requirements (FMFIA § 4)
Statement of Assurance Systems Conform to Financial Management System Requirements
Beginning Ending
Non-Conformances New Resolved Consolidated Reassessed
Balance Balance
Total of Non-Conformances 0 0 0 0 0 0
Compliance with Federal Financial Management Improvement Act (FFMIA)
Agency Auditor
Overall Substantial Compliance Yes Yes
1. System Requirements Yes
2. Accounting Standards Yes
3. U.S.Standard General
Yes
Ledger at Transaction Level
Single Audit Act, grantees’ financial operations, distribution to the appropriate bureaus for audit
internal control structures, and levels of compliance follow-up, resolution and tracking. Each bureau
with applicable laws and regulations must be is responsible for meeting with grantees and
audited each year. All Single Audit reports are negotiating a resolution to the deficiencies identified
forwarded to and screened by the Federal Single in the audit reports, as well as for determining the
Audit Clearinghouse. Those Single Audit reports allowability of any expenditure of Federal funds that
with findings and recommendations requiring audit has been questioned by the auditors.
follow-up are forwarded to the Department’s Office
of Inspector General, who, in turn, forwards those Interior closed 234 of 293 audits under the Single
reports to the Office of Financial Management for Audit Act (80%) in tracking during FY 2007. As in
92
Compliance with Legal and Regulatory Requirements
previous years, the Department plans to continue Audited Financial Statement Results
its monitoring and follow-up activities during
FY 2008 to close audit reports including those As required by GMRA, Interior prepares
with disallowed costs. consolidated financial statements. These financial
statements have been audited by KPMG LLP, an
Performance and Financial Audits independent public accounting firm, since FY 2001
Performance and Financial Audits are OIG (the OIG audited the financial statements prior to
conducted audits of Interior’s programs, FY 2001). Additionally, certain bureaus prepare
organizations, and financial and administrative financial statements that are also audited.
operations. During FY 2007, 67 OIG audits with 443
recommendations were tracked; 393 (89%) were The preparation and audit of financial statements
completed or closed. are an integral part of the Department’s centralized
process to ensure the integrity of financial
Some OIG audit reports contain recommendations information maintained by Interior.
to improve efficiency and assert that funds could
have been put to better use. For the 12 months The results of the FY 2007 financial statement audit
ending September 30, 2007, the OIG issued 4 audit are summarized in Figure 1-65. As shown in the
reports (excluding audits of contracts and grants, table, Interior again achieved an unqualified audit
discussed below) with $13.8 million of FBU. During opinion, the eleventh in a row, for the Department’s
the period, management agreed to and closed consolidated financial statements.
recommendations in 8 reports with $4.3 million of
reported FBU. In FY 2006, the Department did not agree with the
auditors that Indian Trust Assets was a department-
Audits of Contracts and Grants level material weakness. A variety of actions were
For the 12 months ending September 30, 2007, taken in FY 2006 and 2007 to significantly improve
the OIG reported issuing 27 audit reports that internal controls and systems for Indian trust. An
contained $5.6 million in questioned costs, $4.6 extensive amount of documentation was provided
million in unsupported costs, and $1.9 million of to the auditors during the FY 2007 audit cycle.
FBU. During the period, management agreed to and As a result of these actions, the auditors have
closed recommendations in 12 reports with $4.7 downgraded Indian Trust Assets from a department-
million of questioned costs, including $2 million of level material weakness to a significant deficiency.
unsupported costs.
Figures 1-69 and 1-70 summarize the status of
GAO Audits material weaknesses and noncompliance issues
GAO audits are a major component of Interior’s audit reported in the FY 2007 and FY 2006 financial
follow-up program workload and cover a variety of statement audit. As noted previously, Interior reports
programs, operations, and activities. A total of 31 only department-level material weaknesses and
GAO reports with 79 recommendations were carried noncompliances. The Department has established
over from FY 2006. During FY 2007, GAO issued a an internal goal of completing corrective actions for
total of 23 new reports with 29 recommendations. material weaknesses and noncompliance issues
The Department was successful in closing 26 of the by the end of the following fiscal year, unless
54 reports and 41 of the 108 recommendations in the magnitude of the corrective action involves a
tracking during FY 2007 (Figure 1-68). multiyear effort.
FIGURE 1-67
The FY 2006 auditor’s report
FY 2007 DEPARTMENTAL PERFORMANCE GOAL FOR identified 3 instances of
IMPLEMENTATION OF OIG AND GAO AUDIT RECOMMENDATIONS
noncompliance with laws and
Recommendations regulations. The Department fully
Meeting Recommendations Percentage
Agency
Deptartmental Goal Implemented Implemented concurred with only one of the
Criteria findings (See Figure 1-70). During
FY 2007, the Department corrected
DOI TOTAL 490 434 89
2 noncompliance issues reported in
93
Compliance with Legal and Regulatory Requirements
FIGURE 1-68
SUMMARY OF ACTIONS TAKEN IN FY 2007 ON AUDIT REPORTS ISSUED BY THE GAO
Number of Number of
Recommendations Reports
In tracking as of October 1, 2006 79 31
FY 2007 audits added to tracking system after October 1, 2006 29 23
Subtotal 108 54
Closed during FY 2007 41 26
In tracking as of September 30, 2007 67 28
Number of Number of
Code Status of final reports in tracking
Recommendations Reports
D1 Mgmt decisions < 1 yr old 42 19
D2 Mgmt decisions > 1 yr old 25 9
D3 Mgmt decision under formal appeal 0 0
the FY 2006 audits. The third issue, Single Audit Act identified the following priorities for improving its
Amendments of 1996, is the only noncompliance overall information security posture:
issue carried over to the FY 2007 audit, and
management concurs with it. u Continuing improvements in revising
Department Certification and Accreditation
documentation and execution processes,
Major Management Challenges to include OMB requirements for protecting
Confronting Interior personally identifiable information.
The OIG and the GAO annually advise Congress u Further improving the Department’s security
on what they consider to be the major management configurations in accordance with emergent
challenges facing the Department. Appendix A Security Technical Implementation Guides as
presents a summary of the major management directed by OMB.
challenges identified by the OIG and GAO. Appendix
B contains the Department of the Interior’s response u Refining the Department’s compliance effort
to the challenges identified. in meeting the requirement to report system
weaknesses through the Plans of Action and
Milestones process.
Federal Information Security
Management Act u Implementing automated tools to verify and
validate system security configurations.
FISMA provides a framework and relevant agency
roles for ensuring the effectiveness of security u Integrating processes into life cycle
controls with regard to information resources management.
that support Federal operations and assets. The
law gives latitude for OMB and the Department By focusing on these priorities, the Department
of Commerce through the National Institute of was able to continue to make significant progress
Standards and Technology to identify minimum in improving and strengthening its overall security
standards for operating information systems within posture during FY 2007. In addressing the priorities
the Federal Government. listed above, the following actions were achieved:
Information security is an ongoing process u C&A packages were completed for 96 percent
of continuous improvement. Challenges are of bureau systems in the Department’s
constantly present from evolving requirements and inventory. The content of C&A packages
technologies. During FY 2007, the Department created or updated in FY 2007 was
94
Compliance with Legal and Regulatory Requirements
FIGURE 1-69
FY 2007 and 2006 Audited Financial Statements
Material Weakness Corrective Action Plan (as of September 30, 2007)
Fiscal Year
Material Original
Bureau Weakness Corrective Action 2006 2007 Target
Description Date Status
DEPT
Control Over FY 2006 – Develop and implement procedures and
IA Trust Funds internal controls to address the deficiencies in controls X 11/30/07 Downgraded
DO related to Indian Trust Funds.
OST
FIGURE 1-70
FY 2007 and 2006 Audited Financial Statements
Noncompliance Corrective Action Plan (as of September 30, 2007)
Fiscal Year
Original
Noncompliance
Bureau Corrective Action 2006 2007 Target Status
Description
Date
DEPT
IA Federal
FY 2006 – Improve procedures and internal controls to
BLM Financial
ensure that the financial statements and related
BOR Management X 9/30/06 Completed
disclosures are prepared in accordance with the
DO Improvement Act
federal accounting standards.
FWS (FFMIA)
NPS
Potential
Noncompliance
with the
DEPT FY 2006 – Investigate and resolve potential
Anti-Deficiency
noncompliance with the Anti-Deficiency Act,
DO Act, Acquisition X 6/30/07 Completed
procurement regulations, and leasing laws and
NBC Regulations,
regulations to ensure compliance with the Act.
and Leasing
Laws
and Regulations
FY 2006 – Improve grantee monitoring processes to
ensure compliance with the Single Audit Act
DEPT Amendments and obtain necessary audit reports in a
DO timely fashion to meet the requirements of the Act.
Single Audit Act
BOR Amendments X X 9/30/06 Carryover
FWS FY 2007 – Obtain Single Audit, Financial Status, Grant
of 1996
NPS Performance, and Annual Reports and issue
USGS management decisions on audit findings in accordance
with the requirements of the Single Audit Act
Amendments.
standardized along NIST Special Publication on the Federal Desktop Core Configuration
800-37 and related standards and guidelines consistent with the memorandum to agency
associated with the C&A of information Chief Information Officers; establishment of
systems. Windows XP and VISTA Virtual Machine and
Procedures for Adopting the Federal Desktop
u A STIG Working Group was established Core Configurations, issued by OMB on July
to coordinate and approve common, 31, 2007; and, NIST Special Publication 800-
Department- wide security configurations. 68, Guidance for Securing Microsoft Windows
The working group most recently addressed: XP Systems for IT Professionals: A NIST
OMB guidance on standard configurations Security Configuration Checklist.
for the Windows XP Operating System based
95
Compliance with Legal and Regulatory Requirements
u The Plans of Action and Milestones process under OMB’s Information Systems Security
implemented last year were reviewed and Line of Business. By implementing the CSAM
found to significantly improve the involvement solution Interior expects to realize significant
of senior level management, a key goal. improvements to the C&A process through the
Additional guidance was distributed to further increased standardization of C&A processes,
improve the completion of corrective actions consistency and quality of documentation,
and their documentation. The guidance also and efficiencies through integration between
helped ensure FISMA compliance. those three related program components.
During FY 2007, Interior also re-certified
Specific actions, initiated and/or completed, in and re-accredited approximately 56 percent,
FY 2007 include: or 84, of its General Support Systems and
Major Applications.
u Department of the Interior IT Security and
Privacy Program – The program is in the Senior management commitment towards ensuring
final process of completing the Department’s FISMA compliance and continuous improvement
IT Security Policy Handbook to align with regard to assessing risk, demonstrating
Departmental policies with the NIST Special commensurate controls, and documenting agency
Publication 800-53 families of controls, and official approval of operations is demonstrated by
of implementing OMB’s requirements for the Interior’s C&A performance metrics in Figure 1-71.
protection of sensitive agency information,
including personally identifiable information, Plans of Action and Milestones – The POA&M is
by deploying appropriate encryption the OMB-required, authoritative format for tracking
solutions and technology to remote laptops identified weaknesses in IT security programs and
and workstations. Interior completed and systems. Designated Approving Authorities, CIOs,
promulgated the Department’s Privacy Loss and System Owners must review the POA&M and
Mitigation Strategy in accordance with the determine reasonable remediation milestones,
OMB Memoranda on Recommendations schedules, resources, and priorities within their
for Identity Theft Related Data Breach system release plans. The CSAM solution described
Notification, issued on September 20, 2006, above will enable automating various aspects of
and Safeguarding Against and Responding Interior’s POA&M tracking, management, and
to the Breach of Personally Identifiable reporting processes. This FISMA automated
Information (M-07-16), issued on May 22, reporting solution will provide bureaus and offices
2007. Interior also completed the Identity greater simplicity in entering and managing
Theft Task Force charter, established the their known security weaknesses. Department-
Department’s ITTF, and promulgated Office of level reporting will also be greatly enhanced to
the Chief Information Officer Directive 2007- provide the most accurate reporting possible and
005, Departmental Strategy to Safeguard minimize workload. This more efficient reporting
Personally Identifiable Information and mechanism enables constrained staff resources to
Reduce the Collection and Uses of Social focus on the adequacy of weakness descriptions,
Security Numbers. appropriateness of resolution plans, accuracy
of corrective action status, and enable greater
u Certification and Accreditation Process – prioritization of resources to perform increased
In FY 2007 Interior established a compliance oversight. The CSAM solution will also
Memorandum of Agreement with the enable the prioritization of some of the most critical
Department of Justice and initiated a project corrective actions at the Departmental level.
to begin deploying the Cyber Security
Assessment and Management solution Information Security Controls – The Department
in support of improvements to Interior’s established a cross-DOI Internal Security
Certification and Accreditation, POA&M’s Improvement Team working group to develop an
and Internal Control Review processes. The IT Security Defense-in-Depth Strategic Plan that
DOJ is a Shared Service Center provider included approximately 40 recommendations to
96
Compliance with Legal and Regulatory Requirements
address risks associated with insider threats to u Level 4 – procedures and security controls are
Interior’s information and information systems. Initial tested and reviewed.
recommendations from this team were provided
on July 19, 2007, and Interior expects to make final u Level 5 – procedures and security controls are
decisions regarding implementation strategy by fully integrated into a comprehensive program.
November 2007. A number of key recommendations
included in that plan are being integrated into Based on the results of these reviews, Interior
Interior’s IT Roadmap initiative to appropriately has achieved an overall Level 4.51 maturity when
prioritize and align these initiatives with other related measured against the assessment criteria.
and planned initiatives.
Enterprise Resource Management Program –
As part of Interior’s self-assessments performed Key goals are to align the Department’s major IT
under annual ICRs, Interior measures the progress investments with its enterprise architecture, improve
of implementing required security controls consistent security through more consistent and efficient
with NIST FIPS Pub. 200 and SP 800-53, and products and services, and better manage IT
assessed in accordance with NIST SP 800- resources to reduce costs.
53A, for information systems using five levels of
effectiveness with the following maturity levels: Minimum Standards for Security Configurations –
Interior maintains an inventory of approved STIGS
u Level 1 – control objective documented in a for critical IT security components, such as operating
security policy. systems, router configuration, database hardening,
etc. This effort requires constant attention due to
u Level 2 – security controls documented as changes taking place in the field of information
procedures. technology and requirements of OMB for standard
configurations. Interior’s STIG Working Group
u Level 3 – procedures have been implemented. recently adopted OMB’s STIG for the Windows XP
FIGURE 1-71
Certification and Accreditation Activities
97
Compliance with Legal and Regulatory Requirements
Operating System and will begin implementing those Compliance with Key Legal and
standard secure configurations in the first quarter of Regulatory Requirements
FY 2008, resulting in improved security for end-user
computers and a more manageable environment. Interior is required to comply with several key legal
and regulatory financial requirements, including
Portfolio Management Program – Seventy the PPA, the DCIA, and the Independent Offices
percent of actions required in FY 2007 to attain Appropriation Act.
Level 3 maturity along GAO’s IT Investment
Management framework will be completed. In Based on the results of the FY 2007 independent
addition, 100 percent of IT investment expenditures financial statement audit, Interior was determined
will be reviewed through the Capital Planning to be compliant with legal and regulatory financial
and Investment Control process and emphasis requirements and the USSGL components of the
will be placed on ensuring that 95 percent of FFMIA. As noted earlier in this section, Figure 1-66
the Department’s IT investments are within ten presents a summary of the Department’s areas
percent variance of established cost, schedule, of compliance reported in the FY 2007 financial
and performance baselines. Building on these statement audit opinions.
accomplishments, the program goal for 2008 is to
fully attain Level 3 maturity, synchronize capital Prompt Pay, Debt Collection,
planning activities with enterprise architecture and and Electronic Funds Transfer
IT security, and build upon the implementation of the The Department is continuing to improve
Project Management Information System. performance under the requirements of the PPA and
the DCIA. The PPA requires that payments be made
Skilled Workforce – Programs are not successful within 30 days of receipt of invoice; otherwise, the
unless they are managed by a skilled workforce. Federal Government is required to pay interest. The
To develop the best possible information security DCIA requires any non-tax debt owed to the United
programs within the Department, it has developed a States that has been delinquent for a period of over
staffing pattern that allows for the full implementation 180 days be turned over to the Department of the
of an Information Security Program commensurate Treasury for collection. Electronic Funds Transfer,
with its size and balancing the appropriate mix a provision of the DCIA, mandates all recipients of
of Federal employees and contractors. Several Federal payments, except tax refunds, receive their
key positions have already been filled and more payments electronically.
hiring actions are in progress to fill positions that
were formerly contract employees with Federal The Department’s FY 2007 performance resulted
employees. in achieving goals for the PPA (Figure 1-72),
the DCIA (Figure 1-73), and payments made by
The annual FISMA evaluations of both the OIG EFT (Figure 1-74).
and CIO concluded that IT security at Interior
needs improvement, risks and vulnerabilities
remain, and improvements can be made. Interior Financial Management
believes the policies and processes in place to Improvement Initiatives
address those risks are present, that improvements
have been and will continue to be made in a The Department is moving forward to fully comply
timely and cost-effective manner, and that DOI with the E-Gov Travel initiative. During FY 2007,
substantially complies with FISMA. Interior began to roll out an end-to-end automated
travel management system providing booking/
reservations, travel authorization, and travel
voucher processing services under one system.
The system will be interfaced with the current
finance system, Federal Financial System, and
will be integrated with the Financial and Business
Management System as it is deployed throughout
the Department.
98
Compliance with Legal and Regulatory Requirements
FIGURE 1-72
Improved Cost Information
The Department continues enhancement of the
Management Cost Accounting system and its
integration with the financial accounting system.
This integration has focused on providing valid
and useful information related to performance
measurement and budgeting to all levels of
management throughout the organization.
This requires cost information aggregation and
reconciliation that support bureau program
managers as well as Departmental management’s
strategic goals and objectives. We have
accomplished alignment in the Statement of Net
Cost by building an organizational structure that
captures cost transactions at the Mission Area and
the End Outcome Goal level while allowing the
bureaus to adopt flexible goals and activities that FIGURE 1-73
support these outcomes. These flexibilities have led
to some criticism by GAO that we have no single
integrated information system to obtain the MCA
data. However, we have begun addressing this
concern by implementing FBMS in two bureaus this
fiscal year. Full implementation of this system will
facilitate the single data source solution and ensure
consistency across each entity. This fiscal year we
focused on identifying representative measures
within each mission area and identifying the
expense data for these measures as they are built
into the Statement of Net Cost model.
Financial Management Systems
The Department shares the view of the government-
wide CFO Council that a key to improved financial
and program management is improved financial FIGURE 1-74
management systems. Improving financial
management systems will provide for and strengthen
decision-making capabilities and enable Interior
program and financial managers to more effectively
achieve the Department’s missions. The Department
recognizes the importance of its financial
management systems as a part of its capital assets
portfolio and uses sound information technology
investment management principles to plan and
monitor these systems. With FBMS, Interior’s goal
is to achieve and maintain the objective stated in
OMB Circular No. A-127, Financial Management
Systems, for each agency to establish a single,
integrated financial management system. In pursuing
this goal, the Department will follow the information
technology investment management practices
and principles identified in the Clinger-Cohen Act
of 1996.
99
Compliance with Legal and Regulatory Requirements
Financial Management Systems maintaining quality financial management
Improvement Strategy systems. One of the major IT infrastructure
efforts is the Interior Enterprise Architecture
The Department’s goal is to continue to improve Program.
financial transaction processing and to enhance
financial management systems support through an
effective partnership of program, information system, Financial and Business
and financial managers. Management System
The Department of the Interior is in the third phase
The Department relies on financial management of implementing FBMS resulting in the Department’s
systems planned for, managed together, and business transformation over the next few years.
operated to collectively support program and Interior has developed an Interior-wide strategic plan
financial managers. These systems are managed at for the first time in the Department’s history to guide
various levels within the Department. Some of these efforts to deliver more programs and services in a
systems are managed on a Departmental level, fiscally responsible manner — and FBMS is a major
others are maintained at a bureau or local level, component of this strategic plan. This will require
and some are Government-wide systems on which Interior to operate more as one Department and
the Department relies. Collectively, they represent work towards being able to share resources across
the Department’s financial management systems bureaus to maximize resources.
architecture.
When fully operational, FBMS will provide Interior
The Department has viewed the movement toward a with standard business practices supported by a
single, integrated financial system as encompassing single, integrated financial and administrative system
four interrelated elements: (1) improve internal for all bureaus. FBMS is an integrated suite of
controls; (2) eliminate redundant data entry; (3) software applications that will help Interior manage
enable end-to-end transaction processing; and (4) a variety of business functions, including core
standardization of data for improved information financials, acquisition, budget formulation, personal
quality. property and fleet management, real property, travel,
financial assistance, and enterprise management
The Department’s current financial management information.
system improvement efforts involve three major
thrusts: The standardization and integration delivered
by FBMS will help facilitate more collaborative
u FBMS. Define, carefully plan, and implement relationships and establish a common approach
a new generation of financial management to financial and business management. As a
systems to replace existing systems that result, the Department will be positioned to deliver
are no longer supported by their software programs and services in a more efficient and
companies; effective manner. Benefits gained from implementing
this suite of applications will include:
u Critical Programmatic/Financial
Management Systems. Continue to improve u Access to and sharing real-time, accurate
certain critical bureau-based programmatic/ business information that supports effective
financial management programs: Minerals business decisions for mission delivery;
Revenue Management and American Indian
Trust Funds; and u Issuance of accurate financial reports and
analysis of core financial, acquisition, financial
u Interior Enterprise Architecture Program. assistance, and property data; and
Continue to improve the Information
Technology infrastructure supporting financial u Retirement of outdated and legacy systems no
systems. The IT infrastructure is critical to longer supported by their software vendor.
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Compliance with Legal and Regulatory Requirements
FY 2007 Accomplishments personal property/fleet, and enterprise
Several necessary activities were accomplished management information for BLM, and
to ensure the successful 2007 phase of FBMS personal property/fleet for MMS and OSM;
implementation - the deployment of the acquisition
functionality integrated with the November 2006 u Developing and testing conversion and
deployment of core financials; financial assistance interface programs for BLM, MMS and OSM;
functionality; and enterprise management
information and reporting for the Office of Surface u Conducting integration and user acceptance
Mining and the Minerals Management Service. testing;
FBMS is being hosted by Interior’s National
Business Center. The NBC is an OMB-designated u Conducting end-user training; and
Shared Service Provider. Some of the activities
included the following: u Developing the final FBMS cut-over plan for
Deployment 4.
u Improved month-end processing now
managed in a cooperative manner with the
bureaus, the Project Management Office, and Critical Programmatic Systems
the NBC; The Department has two critical programmatic
systems that process financial data. They are the
u Completed system configuration, business Minerals Revenue Management System and the
process procedures, and test scripts for American Indian Trust Funds Systems.
acquisition functionality;
MMS Minerals Revenue
u Developed and tested conversion and Management System
interface programs, including external The Minerals Revenue Management program
interfaces; is responsible for ensuring that all mineral
revenues from Federal and Indian lands are
u Developed final FBMS cut-over plan for efficiently, effectively, and accurately collected,
acquisitions from Interior Department accounted for, verified, and disbursed to
Electronic Acquisition System to Prism; recipients in a timely manner. These revenues
have averaged more than $9 billion annually
u Conducted ongoing operation and over the last five years. To ensure revenues are
maintenance of Deployments 1 and 2 properly collected and disbursed, MMS utilizes
(financial assistance, core financials, and a broad range of financial services and pursues
enterprise management information system for a comprehensive compliance strategy that
OSM and MMS); includes an automated compliance verification
program to validate the accuracy and timeliness
u Planned for the fall 2008 deployment of core of revenues paid. MRM also administers a
financials, financial assistance, acquisition, robust Royalty-In-Kind program, which utilizes
property, and enterprise management an asset management approach to ensure the
information for the Bureau of Land receipt of optimal value for mineral resources.
Management and property for MMS and OSM.
FY 2007 Accomplishments
FY 2008 Planned Activities u MMS continues to explore opportunities
Other necessary activities are planned to be for program application for the RIK
accomplished to ensure successful FBMS Phase 4 program. As a result, the natural gas RIK
deployment in the fall of 2008. Activities will include: business unit was expanded in the Gulf
of Mexico and Wyoming. The crude oil
u Completing all system configuration, business business unit remained relatively static
process procedures and test scripts for core in size. In April 2007, MMS completed an
financials, financial assistance, acquisition, analysis that examined the performance of
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Compliance with Legal and Regulatory Requirements
the RIK program during FY 2006. u In response to the final OIG report
A revenue gain of $26.2 million related dated December 5, 2006, MMS
to both the natural gas and crude oil formally submitted an “Action Plan to
business units was among the highlights Strengthen Minerals Management Service
of the report. Combined with an additional Compliance Program operations” (Action
revenue gain of $2.6 million in additional Plan) to document the improvement
interest earned on RIK revenues received actions taken and planned. The Action
5 to 10 days earlier than under the royalty Plan sets forth specific actions to:
in value program and $2.3 million in (i) provide reliable data for managing
cost avoidance by collecting offshore and reporting on Compliance and Asset
oil and gas in kind instead of in value, Management program operations;
a total revenue gain of $31.1 million was (ii) strengthen the compliance review
measured for the MMS RIK program in process; and (iii) improve performance
FY 2006. measures to better reflect CAM program
operations.
u The FY 2006 RIK Annual Report
responded to Section 342(e)(2) of the u MMS has completed processing the
Energy Policy Act of 2005, requiring the backlog of interest billings related to oil
Secretary of the Interior to submit a report and gas leases on Federal and American
to Congress for each of fiscal years 2006 – Indian lands. MMS billed more than $66
2015 that describes the performance, million of interest on late royalty payments
benefits, and savings associated with and is now regularly billing lessees for late
the MMS RIK program. In FY 2006, payments on a monthly basis.
while volumes taken in kind decreased
due to effects of Hurricane Katrina, total u Working in partnership with the BLM,
revenues to the U.S. Treasury increased IA, the Office of the Special Trustee
when compared to the previous year. for American Indians, and the U.S.
A total of 72,279,559 barrels of oil Geological Survey, the MMS is leading
equivalent were taken in kind and sold an effort to expand the number of
by MMS in FY 2006. This volume is Indian outreach sessions provided by
approximately 90% of the volumes taken developing Indian oil and gas training that
in kind for FY 2005. The value of RIK oil covers all aspects of trust management
and gas in FY 2006 was $4,087,885,440, including land ownership, leasing,
a 10% year-on-year increase in value— drilling, production verification, lease
the increase reflecting the effect of inspection, royalty reporting, compliance,
markedly higher energy commodity prices royalty disbursement, and financial trust
during FY 2006. As of the end of FY 2006, accounts. The new training is tailored
MMS took in kind approximately 72% for tribes and Individual Indian Mineral
and 45% of the crude oil and natural gas Owners in the various regions where
royalty volumes, respectively, produced outreach is conducted as well as for
daily in the Gulf of Mexico. In April 2006, Department of the Interior employees who
MMS, in consultation with the State of are involved in Indian oil and gas activities.
Wyoming, began taking natural gas in kind The additional outreach sessions and
for Federal gas production in Wyoming at the joint agency training program will
the rate of 30,000 Million British Thermal provide Indian communities and Interior
Units per day. employees with opportunities to gain more
knowledge of the full spectrum of Indian
u In July 2007, MMS began deliveries of mineral resources.
royalty oil to the Department of Energy at
a rate of approximately 50,000 barrels per u As a result of provisions of the EPAct
day for the Strategic Petroleum Reserve. governing the payment of royalty on
geothermal resources produced from
102
Compliance with Legal and Regulatory Requirements
Federal leases and the payment of direct- balances; providing adequate controls over
use fees in lieu of royalties, the MMS receipts and disbursements; providing periodic,
published a final rule on Geothermal timely account reconciliations; determining
Valuation in May 2007. The EPAct accurate cash balances; and preparing periodic
provisions amended the Geothermal statements of account performance and
Steam Act of 1970. The final rule amends balances. The Act also addressed the need for
the current MMS geothermal royalty developing systems for accounting and investing
valuation regulations and simplifies the funds, for reporting to account holders, and for
royalty and direct-use fee calculations for maintaining accurate data on ownership and
geothermal resources for leases issued leasing of Indian lands.
under the EPAct and leases whose terms
are modified under the EPAct. In FY 2001, the Department commissioned
an independent review which concluded
FY 2008 Planned Activities that the previous reform results were not
u Implement an effective risk metrics accomplishing the intended comprehensive
program to quantitatively identify result. Accordingly, the Department developed a
exposures and inform commercial more comprehensive and integrated approach—
decision-making within the RIK Program. the Comprehensive Trust Management Plan,
dated March 28, 2003—that sets forth a
u Expand RIK portfolio through strategic framework, including six strategic goals
diversification, after enhancing internal (and various objectives) for the Department to
controls, risk policy frameworks, and meet in fulfilling its obligations to its fiduciary
human resource skill sets. trust beneficiaries:
u Establish a new risk-based compliance u Beneficiary services that are trusted,
strategy. accurate, and responsive;
u Continue to implement the Strategic u Tribal self-governance and self-
Business Plan. determination that increase participation in
managing assets;
u Publish a proposed Takes versus
Entitlements Rule. u Ownership information that is accurate,
timely, and reliable;
u Publish a proposed rule for Prepayment
of Royalties on Marginal Properties. u Land and natural resources management
that maximizes return while meeting
u Publish final rules on Indian Oil Valuation beneficiary desires (constrained by
and Reporting Amendments beneficiary preferences on other factors);
u Publish proposed rules on Coal Valuation u Trust fund assets management that meets
and Debt Collection. fiduciary standards; and,
American Indian Trust Fund Systems u Administrative services that: (1) enable
The American Indian Trust Fund Management and empower the organization and
Reform Act of 1994 identified some of the workforce to be an effective fiduciary
Secretary’s core responsibilities for trust fund trustee; and (2) provide modern,
management and established the Office of appropriate systems and tools to manage
Special Trustee for American Indians. The Act the fiduciary trust.
identified actions required for the Secretary’s
proper discharge of trust responsibilities, The CTMP identifies three primary business
including providing adequate systems for lines: (1) beneficiary trust representation, (2)
accounting for and reporting trust fund trust financial management and stewardship,
103
Compliance with Legal and Regulatory Requirements
and, (3) management of land and natural leasing system, Indian trust beneficiaries began
resources. Each business line represents receiving quarterly statements that include
a distinct group of products or services more detailed information on trust assets and
for comprehensive trust management and trust income. Other selected accomplishments
encompasses related processes, products, include:
and services within its scope. Strategic goals
and specific related objectives fit within these u Continued implementation of the FTM,
business lines. including the migration of automated
systems that are integrated in order to
In June 2007, the Department released the support the FTM trust business processes
2007 Historical Accounting Plan for Individual and fulfill beneficiary needs and fiduciary
Indian Money accounts. The 2007 plan reflects requirements.
what has been learned in 4 years of historical
accounting. The Department’s plan includes u Utilized information from the MRM, an
the provision of historical accountings for about MMS program for collecting, accounting
371,000 IIM accounts open on or after October for, and distributing mineral revenues from
25, 1994, that had balances. Implementation of both Federal and Indian mineral leases,
the plan is estimated to cost $335 million. to disburse lease revenues to individual
Indian beneficiaries at the converted
FY 2007 Accomplishments agencies.
Through the Office of the Special Trustee for
American Indians, the Department of the Interior u Distributed $21.8 million to individual
is in its third year of implementing the Fiduciary Indian trust account holders who
Trust Model. The FTM is designed to enhance were previously on the “Whereabouts
beneficiary services for tribes and individuals, Unknown” list through collaborative efforts
with better information about ownership, land between OST, IA, and tribal governments.
and natural resource assets, trust fund assets,
Indian self-governance and self-determination, u Safeguarded millions of Indian trust
and administrative services. When fully records at the American Indian Records
implemented, the FTM will transform current Repository, in Lenexa, Kansas. So far,
trust processes into more efficient, integrated, more than 162,321 boxes containing
and fiscally-responsible business processes almost 406 million pages of Indian records
that better meet the needs of beneficiaries and have been electronically indexed and
employees. stored at the state-of-the-art storage
facility.
Transitioning from the approximately 56 non-
integrated Trust-related information systems u Provided records management training for
to an integrated trust data environment is the 697 IA and OST records contacts and 295
cornerstone of the FTM. By the close of FY tribal employees.
2007, OST and IA achieved a milestone in trust
management reform through conversion to a u Increased direct deposit by 3,508 IIM
new leasing system which is integrated with the account holders, thus avoiding lost checks
land title system and interfaces with the Trust and providing timely delivery of funds.
Funds Accounting System. With the Exception
of Compact/Contract Tribe encumbrance data, u Worked with 43 tribes that performed or
this conversion provides a single repository sought to perform OST programs and
of ownership for DOI-processes Indian Trust functions on behalf of their members,
land conveyance and encumbrance data. As and worked to ensure that 75% of those
of September 30, 2007, all locations were tribes had program standards for the OST
successfully converted to the new leasing functions in place.
system. As IA locations converted to the new
104
Compliance with Legal and Regulatory Requirements
u Published informational brochures and u Revised, implemented, and conducted
other material for Indian trust beneficiaries training on standardized IA Handbooks
to help educate and inform them about and OST Desk Operating Procedures in
their trust accounts and assets. compliance with new regulations.
u Held outreach events and attended Indian u Completed analysis of probate information
country community events, such as pow- across all trust systems and implemented
wows and meetings, across the country to reconciliation recommendations.
help inform Indian trust beneficiaries about
their accounts and assets. u Moved decision-making on selected
transactions to the local level.
u Conducted assessments of business
process workflows, integrated system u Completed Data Quality and Integrity
support, and workforce plans at field project tasks for 50 IA agencies.
locations.
u Implemented post-quality assurance
u Incorporated regulatory initiatives into review processes at 2 IA LTRO’s.
operating procedures, manuals, and
handbooks. u Conducted 45 trust examinations and 42
records management assessments.
u Revised and enhanced training curriculum
for the FTM standardized processes. u Enhanced IT security through
improvements to the vulnerability scanning
u Provided quarterly trust-related training process and the re-certification and
including: Trust fundamentals, orientation accreditation of systems. OST’s General
programs for OST Fiduciary Trust Officers Support Systems was re-accredited in
and Deputy Superintendents as well as FY 2007.
new hires, Trust Fund Accounting System,
lockbox operations, and other related trust u Redesigned and updated the OST
systems. external Web site <http://www.doi.gov/ost>
to be interactive and informational for
u Certified 73 Interior employees as Indian Trust account holders.
Certified Indian Fiduciary Trust Analysts
and/or Specialists. u Worked with a contractor to communicate
with Indian trust beneficiaries about the
u Aligned the Risk Management program services and products available to them
with OMB Circulars No. A-123 and No. and how Indian trust management reforms
A-130 for all OST locations and completed affect them.
a comprehensive risk management plan
that identifies the schedule of internal u Developed and implemented Cannon
control reviews for all OST programs over Financial Institute’s Certified Indian Trust
the next 3 fiscal years. Examiner certification program.
u Distributed an aligned risk management u Completed a Workforce and Diversity
assessment tool that provides automated Plan that contributes to the achievement
assessment and corrective action plan of program objectives by providing a
development and maintenance. basis for justifying budget allocation and
workload staffing levels.
u Enhanced the lockbox operations for
additional funds processing.
105
Compliance with Legal and Regulatory Requirements
u Partnered with the Gallup Organization to ensure that reporting requirements are
conduct a Q-12 Employee Opinion Survey incorporated into annual Memoranda of
to gather information to create a more Understanding.
constructive and productive workplace.
u Assist compact/contract tribes that are
u Created a Workforce Improvement Team seeking access to the Department’s
comprising approximately 40 program TrustNet.
office representatives to address areas
identified in the 2006 Federal Human u Align Activity-Based Cost/Management
Capital Survey. System activity codes and outputs with
projected budgetary funding levels.
FY 2008 Planned Activities
u Certify additional Interior employees as u Expand the scope of trust examinations
Certified Indian Fiduciary Trust Analysts to all Department offices performing trust
and/or Specialists. functions, including the MMS and the
BLM.
u Develop and provide job-specific training
to Interior and tribal employees in FTM u Complete 45 record management
business processes (e.g., lockbox; tribal assessments and 38 trust examinations.
self-governance and self-determination;
and trust accounting). u Collect and index 10,000 boxes of inactive
records and continue to maintain the Box
u Respond to 90 percent of inquiries to the Index Search System (BISS) that allows
Trust Beneficiary Call Center within 2 for record retrieval on an as-needed basis
business days and the balance of inquiries for over 200,000 boxes of inactive records.
within 30 days.
u Assist the National Indian Programs
u Use the Indian Trust Appraisal Request Training Center in designing curriculum,
Tracking System to accurately track and hosting, and presenting courses for Indian
project Office of Appraisal Services cost and tribal staff.
and performance data.
u Resolve 25 percent of “Whereabouts
u Strengthen the risk management program Unknown” accounts.
by: (1) increasing the frequency of self-
assessment cycles; (2) improving OST u Conduct post quality assurance review on
staff expertise through additional risk the encoding of Trust Asset Accounting
management training; (3) expanding the Management System leasing module
Risk Management Assessment Tool to data to ensure accuracy as well as timely
include a section that addresses risks interface with TFAS and the TAAMS title
and associated internal controls at the module.
senior management level; and, (4) aligning
RM-PLUS with regulatory and legislative u Use Re-engineering Continuous
requirements, in particular OMB Circular Improvement Teams to identify the need
No. A-123. for revised business processes, enhanced
data systems, standard operating
u Continue to work with other Interior procedures, handbooks, validating
bureaus and offices on regulatory metrics, desk operating manuals, and new
initiatives. skills training.
u Obtain appraisal backlog information from u Interact with at least 300 tribal, individual
compacted and contracted tribes and Indian and Alaska Native beneficiaries
through local community outreach
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Compliance with Legal and Regulatory Requirements
programs regarding asset management processes and information sharing, blueprints
and trust reform initiatives. identify gaps and redundancies in Interior’s existing
IT portfolio that hamper successful achievement of
u Actively engage tribal and individual Indian strategic and programmatic goals.
beneficiaries in the management of trust
assets. IEA also issued a policy on data resource
management which defines roles and responsibilities
u Advocate the importance of estate for data standardization and stewardship. IEA
planning for individual Indian beneficiaries issued an associated procedures document for
to reduce the impact on fractionation of data standardization, which provides a consistent
trust land holdings. methodology for defining data standards to meet the
broadest organizational needs.
Interior Enterprise Architecture Program In efforts to further formalize data standardization,
For the last three years, Interior’s Enterprise IEA has implemented performance measures
Architecture program exceeded established for data quality for the Departmental Enterprise
maturity thresholds and therefore, achieved a rating Architecture Repository. These measures will be
of green from OMB. In 2007, the IEA program used to conduct quarterly evaluations of all bureau
was recognized as one of the top five enterprise enterprise architecture programs.
architecture programs across all Federal agencies.
Agencies were evaluated on three factors of their EA The Deputy Secretary of the Interior approved an
Program: completeness, use, and results. EA Governance Plan that describes the decision-
making processes used during the development of
At the end of FY 2006, Interior achieved the highest segment architectures for Interior’s business areas.
rating from GAO in an assessment of 28 Federal The Deputy Secretary also approved the annually-
agencies against the GAO Enterprise Architecture updated Interior Enterprise Transition Strategy. The
Management Maturity Framework. This rating ETS defines the sequencing for all modernization
indicated the IEA had fully achieved more of the efforts across Interior. It also consolidates and
evaluation criteria, (i.e., 97%) than any of the other coordinates the changes proposed in modernization
agencies assessed. blueprints.
The IEA program has proven that its approach is The Methodology for Business Transformation
indeed a valid one by demonstrating tangible results has been revised and updated to MBT 1.5. MBT
from the program. In fact, in 2006, the President’s provides guidance on the approach Interior uses
Management Agenda Initiative Recreation One Stop, for conducting segment architecture analyses and
took a major step forward with the implementation developing modernization blueprints. The new MBT
and deployment of the National Recreation 1.5 has been enhanced to include specific guidance
Reservation Service. The NRRS is featured at integrating capital planners and appropriate EA
the all new Recreation.gov and provides one-stop governance bodies in the process of creating the
shopping for the citizen’s recreation needs. This is proposed investments for modernization blueprints.
a direct result of implementing Interior’s Recreation
Modernization Blueprint. In addition to OMB scores and internal recognitions,
the IEA program was also noted externally by:
Interior has completed two new modernization
blueprints — one for Human Resources u 4th Annual E-Gov Institute as winner for the
Management and another for the cross-cutting 2006 Excellence in Enterprise Architecture for
mission function of Land Management Planning Leadership in EA;
and National Environmental Policy Act. Both
modernization blueprints were approved by the u Cited by the OMB Federal Enterprise
Interior Investment Review Board in accordance Architecture Program Management Office as
with the IEA Governance Plan. In addition to a best practice for other Federal agencies to
recommendations to improve DOI’s business leverage in developing segment architectures;
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Compliance with Legal and Regulatory Requirements
u By request, the DOI Chief Architect and security. The Department currently spends about
members of the staff regularly speak about $500 million on IT infrastructure investments per
DOI’s EA program at the Federal Enterprise year. Interior will take a two-pronged planning
Architecture Certification Institute National approach that will result in a tactical roadmap
Defense University’s CIO and EA certification and a strategic IT infrastructure modernization
courses and the U.S. Department of blueprint. At the same time, Interior will be aligning
Agriculture Graduate School; and it’s planning initiatives to comply with the OMB lead
IT infrastructure Line of Business. The ITI LoB will
u Outreach and information sharing sessions establish benchmarks for cost and performance
with over 25 Federal, state, and local that all Federal agencies are expected to meet.
government agencies, as well as five foreign Some of the areas that will be reviewed are end-
governments, for sharing best practices and user computing, desktop and support services,
helping the EA community. data centers, networks and telecommunications.
Security concerns for all of these areas will also be
FY 2007 Accomplishments addressed along with asset management.
u Interior achieved the highest rating from the
GAO in an assessment of 28 Federal agencies As with all blueprints, the IEA program will work
against the GAO Enterprise Architecture closely with the appropriate business and IT
Management Maturity Framework. This rating representatives across Interior in the development
indicated the IEA program had fully achieved and eventual implementation of the IT infrastructure
more of the evaluation criteria than any of the roadmap and blueprint.
other agencies assessed.
u Two IEA blueprints, Human Resources and Financial Management
Management Planning NEPA were approved Human Capital
by the IRB in June 2007.
The Department of the Interior’s financial
u Interior’s EA Program generated international management community continues to face major
interest. The IEA program has provided workforce challenges. The decade of the 1990s
information sharing sessions on its methods brought significant legislation and increased
and achievements to representatives from responsibilities for the entire Federal financial
Singapore and South Korea. Interior’s Chief management community. The need to expand
Architect has also been the keynote speaker knowledge and expertise by the financial community
at EA conferences sponsored by government continued with the requirements of the PMA, and,
agencies. more recently, OMB’s revised Circular No. A-123,
Appendix A. In addition to the Governmentwide
u MBT and DEAR Training - Training sessions initiatives, Interior is also engaged in a
in the Denver, Colorado, and Washington, DC, Departmentwide effort to implement a fully
metro areas were held to train architects and integrated FBMS.
other stakeholders on using MBT and DEAR.
It is imperative that Interior have an adequate
u Improved EA Governance and Management number of highly qualified financial management
oversight by instituting semi-annual reporting personnel. These individuals must have the
of Bureau EA Maturity Assessments. competencies required to successfully transition to
and implement FBMS, as well as the ability to lead
FY 2008 Planned Activities a world-class finance organization in the future. The
The main focus for the IEA in 2008 is on developing need for a highly-qualified financial management
an IT infrastructure modernization blueprint. The workforce comes at the same time that many “baby
goal is to optimize Interior’s IT infrastructure assets boomer” supervisors, managers, and executives
and improve overall management, operations, and reach retirement age.
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Compliance with Legal and Regulatory Requirements
A financial management workforce plan was u Executed a Fall 2006/Spring 2007 recruitment
completed and published at the end of 2004. strategy;
Interior’s Chief Financial Officer Council approved
the plan’s major recommendations and established u Participated in Office of Personnel
a Workforce Steering Committee in early 2005. The Management forum on best practices in
workforce plan’s four major recommendations are: recruitment; and
u A strategic focus on new employee u Led panel on acquisition intern programs
recruitment; at the Federal Acquisition Conference and
Exposition.
u Retention of employees who have or can
develop needed competencies; The 2005 intern classes completed the following
courses:
u Career paths to develop employees at all
levels of experience with “workforce of the u Auditing Fundamentals
future” skills; and,
u Critical Thinking Problem Solving
u Training and professional development u Internal Control
opportunities for both technical/analytical skills u Essentials of Analysis
and business/organization skills to enhance
competencies and develop employees who u Congressional Operations Seminar
are flexible and versatile. u Leading and Managing Change
Interior established the R. Schuyler Lesher u Leadership Skills & Techniques
Financial Management Career Intern Program in u Briefing & Presentation Skills
2002 to recruit and train entry-level professionals
in accounting and financial analysis for the
Department and the bureaus. Each year Interior’s The 2006 intern classes completed the following
financial management community partners with DOI courses:
University to recruit a new class of high potential
entry-level accountants and financial analysts to u Dollars and Sense
participate in this career development program.
u Government Budget & Accounting
FY 2007 Accomplishments for the Intern Program u Multi-generational Workforce
u Recruited 6 new interns for the Class of 2007; u Mentoring
u Completed the first year of training and u Budget Analyst’s Guide for Formulation
development for the 2006 FMCIP Intern class u Auditing Fundamentals
(five interns);
u Basic USSGL
u Graduated the FMCIP Class of 2005 (four u Appropriations Law
members);
u Briefing & Presentation Skills
u Conducted outreach activities at u Government Environment
geographically dispersed colleges and
universities with diverse student populations. FY 2008 Planned Actions for the Intern Program
Recruited at career fairs in the South (Texas), u Increase the number of participating Interior
the West (Colorado), the Southeast (Florida), bureaus in the FMCIP Class of 2008
Mid-Atlantic (DC and Virginia), the Northeast
u Recruit a new class of interns; and
(New Jersey);
u Continue providing training opportunities for
the class of 2007 and 2006.
109
Compliance with Legal and Regulatory Requirements
Sponsoring Comprehensive Training FY 2007 Accomplishments
and Career Development Programs u Completed a Departmentwide financial
in Financial Management management skills gap analysis based on the
The other critical component of Financial Financial Management Competency Model.
Management Human Capital is to provide
appropriate training and professional development u Department of the Interior University
opportunities to existing financial management sponsored the following finance-related
personnel so that they are prepared to carry out their courses:
growing responsibilities. The Financial Management
Workforce Plan noted specific competencies n Basic Standard General Ledger
Interior’s workforce must develop to support both Accounting;
the implementation of the FBMS and a successful
transformation to a world-class finance organization. n Federal Appropriations Law;
The plan emphasized the need for a simultaneous
focus on competency training and development for n Intermediate Standard General Ledger;
both the current transition period and for the future.
n Internal Controls; and
The Financial Management Workforce Plan
recommends a comprehensive financial n Understanding Budget Formulation
management career path program, with career and Execution.
paths defined at multiple levels. Interior has
already implemented an entry-level phase of the FY 2008 Planned Actions
Financial Management Career Paths Program with u Conduct a Financial Management needs
the FMCIP. Initial work has begun on the design assessment
and development of a competency model. The
competency model will be used to develop and u Begin to design the Financial Management
implement the mid-level, senior-level, and executive- Career Paths curriculum
level components of this comprehensive program.
Due to budget constraints the Business Financial Data Stewardship
Management Conference was not held in FY 2007.
This conference allows the financial community Financial data stewardship is the process of
to discuss issues that cross bureau lines and managing information needed to support program
meet face-to-face with those individuals that they and financial managers, and ensures that data
normally only hear as a voice on a conference call. captured and reported is accurate, accessible,
The Conference is planned to be held in FY 2008 timely, and usable for decision-making and activity
which will afford financial management staff with an monitoring. The objective of data stewardship policy
opportunity to network, attend sessions on subjects is to synchronize data collection processes, reduce
of common interest, and discuss common issues data redundancy, and increase data accessibility,
among themselves. availability, and flexibility in a systematic manner.
Effective data stewardship requires that (1)
Many of the individuals active in the implementation definitions clearly describe requirements and
of the Financial Management Workforce Plan are characteristics of data to be maintained in financial
from the “baby boomer” era and several retired management systems; (2) data are created,
during FY 2007. New individuals have been named recorded, and reported in compliance with
to assist in the effort to implement the Plan. definitions; and, (3) feedback is provided when data
are inadequate to meet user needs for information.
Additionally, data assurance must provide attestation
to, or comments on, the integrity of the information in
the system.
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Compliance with Legal and Regulatory Requirements
The Office of Financial Management provides FY 2007 Accomplishments
overall coordination of data stewardship functions u Established project team to review bureau
for financial data in Interior. The data stewardship revenue source codes, standardize codes,
function involves two levels of activities: (1) and create a handbook for transition to FBMS.
participating in setting Government-wide financial
data standards; and (2) setting financial data u Reviewed existing Budget Object Class
standards in coordination with the bureaus’ finance designations and User Product Codes to
operations. prepare for revision of Handbook in 2008.
PFM participates in Government-wide financial u Revised the Inter/Intra Agency Handbook to
data standard setting activities and coordinates reflect the changes in Treasury business rules.
with the Standard Accounting Classification
Advisory Team on setting standards for financial u Provided support to BLM and NBC in reviews
data for use throughout Interior. PFM monitors the of their internal processes to identify areas
Departmentwide data definition process, monitors of opportunity for strengthened financial
data creation and compliance processes, ensures management.
data usage relies on information derived from
data consistent with the intended definition, and u Published multiple issue papers to facilitate
ensures adjustments are made to data definitions the issuance of new or improved financial
when it is inadequate to meet user needs. In management and accounting policies for intra-
addition, PFM participates in the development and governmental activity.
implementation of the FBMS and Activity Based
Costing/Management. This function also coordinates u Published issue paper to facilitate Parent/Child
Departmental financial data definitions with the three reporting due to the changes in OMB Circular
key Government-wide financial data standard setting No. A-136.
groups—the Financial Management Service’s
USSGL Board, the Federal Accounting Standards u Prepared Department responses to Federal
Advisory Board, and OMB. Accounting Standards Advisory Board issues
related to Oil and Gas reporting, National
To coordinate the establishment and implementation Aeronautics and Space Administration
of financial data standards in Interior, the bureaus Research and Development Reporting,
and PFM have chartered the SACAT, under the Inter-Entity Costs, and Heritage Asset and
leadership of the Finance Officers’ Partnership, Stewardship Land Reporting,
to establish and maintain a common approach
among the bureaus for addressing USSGL issues u Established Condition Assessment Guidelines
that relate to accounting policy and procedures, for U.S. Department of the Interior Library
reporting requirements, internal controls, and SGL Collections.
maintenance.
u Participated in FASAB’s Inter-Entity Cost Task
In addition to the SACAT, Interior has developed a Force to develop a draft technical release in
Financial Statement Guidance Team. The FSGT is support of Statements of Federal Financial
comprised of the various bureaus of the Department Accounting Standards #4, Managerial Cost
and deals with issues and concerns related to the Accounting Concepts and Standards, and
preparation of the performance and accountability SFFAS #30, Inter-Entity Cost Implementation.
report and implementation of OMB Circular No.
A-136, Financial Reporting Requirements. u Continued to analyze and enhance the
reporting process to support performance
reporting under the GPRA and the timely
preparation of the Annual Performance and
Accountability Report.
111
Compliance with Legal and Regulatory Requirements
u Coordinated the reconciliation of intra-Interior FY 2008 Planned Activities
financial balances and the reconciliation u Continue to analyze and enhance the
of Interior transaction balances with other reporting process to support performance
Federal agencies to ensure compliance with reporting under GPRA and the timely
new Intragovernmental Business Rules. preparation of the Annual Performance and
Accountability Report.
u Worked closely with the FBMS Executive
Steering Committee to monitor implementation u Continue to coordinate and prepare
progress; address and resolve accounting Department responses to draft FASAB, OMB,
and reporting issues; and ensure appropriate and Treasury financial reporting guidance.
internal controls are planned, implemented,
and functioning as intended. u Continue to coordinate the reconciliation
of intra-Interior financial balances and the
u Worked with Department of Homeland reconciliation of Interior transaction balances
Security in conjunction with the United States with other Federal agencies.
Coast Guard, and U.S. Army Corps
of Engineers to resolve reporting issues u Continue to work closely with the FBMS
related to the Sport Fish Restoration Boating Execuive Steering Committee to monitor
Trust Fund to ensure compliance with OMB implementation progress; address and resolve
Circular No. A-136. accounting and reporting issues; and ensure
appropriate internal controls are planned,
u Continued to communicate with several implemented, and functioning as intended.
agencies on elimination issues (Department of
Energy, Agency for International Development, u Continue to work with bureaus to fully
Department of Defense, Department of Labor, implement ABC/M throughout the Department.
Department of Commerce, The Smithsonian
Institution, and National Aeronautics and
Space Administration).
112
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