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SBA Response

SBA Response

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Published by: House Oversight Committee on Sep 07, 2011
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U.S.

SMALL BUSINESS ADMINISTRATION
WASHINGTON, D.C. 20416

March 22, 2011 Response to House Oversight Committee on Oversight and Government Reform RE: Inquiry on Financial Management dated March 8, 2011 The Small Business Administration respectfully submits the following responses at the Committee’s request.

1. Identify and briefly describe each of your agency's business and accounting systems. If separate divisions, bureaus, or offices of your agency use separate systems, identify which divisions, bureaus, or offices use each system. The Small Business Administration’s business and accounting systems include the following: Joint Administrative Accounting Management System (JAAMS) JAAMS is the accounting system used to manage SBA’s accounting and budgeting for agency administrative costs. JAAMS is a commercial off-the-shelf software package produced by Oracle, Inc., and is certified for use by federal agencies. Loan Accounting System (LAS) LAS is the primary system used to manage and account for loans and loan related activity for all SBA loan programs. These activities include allotment of funds, loan origination, servicing, liquidation, guaranty purchases, collections, and disbursements for loans. LAS is comprised of a number of integrated modules on different platforms, including mainframe programs built by SBA and commercial off-the-shelf packages. Loan transactions are interfaced to a consolidated financial accounting and reporting Disaster Credit Management System (DCMS) The Office of Disaster Assistance uses DCMS, a commercial off-the-shelf (COTS) system to support disaster loan origination functions. The DCMS system interfaces with LAS on a daily basis to send loan application and accounting information. Surety Bond Guaranty (SBG) SBG generates daily payment files for refunds of Surety and Contractor fees resulting from cancellation, decrease, or overpayment of fees. Financial Management System (FMS) FMS is comprised of a number of modules (including DCFS, FRIS and CGL) that support consolidated financial accounting and reporting functions of the SBA. Transaction data from JAAMS and LAS is interfaced to FMS for consolidated Agencywide financial activity. FMS modules are web-based systems built by SBA using a commercial application development platform and database. The SBA does not have any bureaus or sub components.

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2. Explain how the business and accounting systems identified in response to Request No.1 interact with one another. The following graphic presents the interactions of SBA’s business and accounting systems:

Loan Accounting

Loan Accounting System (LAS)

Financial Management System (FMS)

Joint Administrative and Accounting System (JAAMS)

Administrative Accounting

Disaster Loan Origination DCMS

Internal and External Reporting

Surety Bond Guaranty (SBG)

Loan transactions are captured through DCMS for disaster recovery loans and through a module of LMS for all other SBA loan programs. Loan originations are then processed through the modules of LAS at the detailed loan level. Administrative accounting transactions are captured in JAAMS. Information from both systems is posted daily to modules within the FMS. FMS is the consolidated system of record for SBA financial and business information. Modules of FMS provide management and financial reports, as well as interface information to government-wide financial and business systems outside of SBA.

3. For each system identified in response to Request No.1, state whether Information is found in that system is regularly or periodically submitted to any of the government-wide accounting systems maintained by the Department of the Treasury, e.g., GFRS, FACTS I, FACTS II, IFCS, etc., and explain how and at what intervals those submissions occur, including descriptions of both manual and automated processes. The following table depicts the information regularly submitted to the Department of the Treasury systems:

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System

Interface

FMS

FACTS I to Treasury

Target System Department of the Treasury Treasury/FACTS I

Type of Data

Type of Transfer Automated generation and submission.

Frequency

General Ledger Balances General Ledger Balances trial balance data

FMS

FACTS II to Treasury Intergovernmental balances (F-File) 224 Cash Reporting

Treasury/FACTS II Treasury

FMS

FMS

Treasury/GWA

FMS

IFCS IFCS (intergovernmental fiduciary Confirmation System) GFRS Treasury/GFRS

FMS

FMS

GFRS

TROR – Treasury Report of Receivables Treasury/TOP

Automated generation and submission. Automated generation and submission. Cash receipts Automated and generation and disbursements submission. Confirmation Manual of payables generation of and data and receivables manual between submission to agencies IFCS. Financial Manual Statements generation of data and manual submission to GFRS. Loan Status , Automated Delinquency submission New TOP Referrals Automated generation and submission via Connect:Direct Automated generation and submission via Connect:Direct Automated generation and submission via Connect:Direct Automated generation and submission via Connect:Direct

Annually (End of Fiscal Year) Quarterly

Quarterly

Monthly

Quarterly

Annually

Quarterly

LAS

Treasury Offset Program (TOP) referrals TOP Referral Updates

Weekly

LAS

Treasury/TOP

LAS

FedDebt (Cross Servicing) Referrals Report of Voluntary Payments Received by SBA on FedDebt-

Treasury/FedDebt

Updates to previously transmitted TOP referrals New FedDebt Referrals

Weekly

Weekly

LAS

Treasury/FedDebt

Details of voluntary payments received after a loan was

Weekly

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referred cases

referred to FedDebt Treasury/FMS Payment files Automated Daily generation and submission via Connect:Direct

FMS/DFCS Disbursement processing

4. For each system identified in response to Request No.1, state whether information found in that system is regularly or periodically submitted to the Office of Management and Budget's ("OMB") MAX Information System, and explain how and at what intervals those submissions occur, including descriptions of both automated and manual processes. The following table depicts the information regularly submitted to the Office of Management and Budget MAX Information System:
System Interface Target System OMB/MAX OMB/MAX Type of Data Type of Transfer Semiautomated generation, automated submission. Manual submission to MAX systems. Frequency

FMS/FRIS

132 Submission

Apportionment requests

As needed

Presidents Budget Submission

OMB/MAX

Expense and budget data.

FMS/FRIS

Outlays report

OMB/MAX

Cash Reporting

FMS

MAX

OMB/MAX

Financial Statements Agency Financial Report (PAR Pilot)

Manual generation and manual submission. Upload of Excel file into MAX Upload of Excel file into MAX

Bi-annual at the beginning of the FY and at the midyear review Quarterly and on demand Quarterly

LAS/FMS

MAX

OMB/MAX

Annually

5. For each system identified in response to Request No.1, describe recent, current, and planned migration or modernization projects.

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The following modernization projects are being undertaken on the SBA’s business and accounting systems: Current - JAAMS system is being upgraded to the next vendor release (Oracle Federal Financials Release 12) Planned – The databases underlying FMS will be converted from Sybase to Oracle Planned – LAS underlying programming code will be ported to a newer release of COBOL Planned – Improvements to the LAS user interface 6. In addition to your agency's submissions to government-wide accounting systems maintained by the Department of the Treasury and OMB, as described in response to Requests Nos. 3 and 4, does your agency publish any of the same information online for public viewing? If so, describe how and in what format that information is published. The SBA does not publish any of the same information online for public viewing.

7. Identify and briefly describe each system that your agency uses to manage grants, direct loans, and/or loan guarantees. If separate divisions, bureaus, or offices of your agency use separate systems, identify which divisions, bureaus, or offices use each system. Loans Direct loans and loan guarantees are managed by the LAS and DCMS systems as described at No. 1, above. Grants PRISM Grant proposal and award activity is managed in the PRISM system. PRISM is a commercial offthe-shelf product purchased from Compusearch that is used for grants and contracts management at the SBA. JAAMS Grant expenditure activity is managed in the SBA’s administrative accounting system, JAAMS, as described at No. 1, above. All SBA divisions use the same systems for loans and grants. 8. For each system identified in response to Request No.7, explain how it interacts with any business or accounting system identified in response to Request No.1. Loan systems at SBA are business and accounting systems as described at No. 1, above. JAAMS, also described at No. 1 above, is the primary administrative accounting system for the SBA and grant expenditure activity is tracked in that system. 9. For each system identified in response to Request No.7, state whether information found in that system is regularly or periodically submitted to the Catalogue of Federal Domestic Assistance (CFDA), and describe how and at what intervals those submissions occur, including descriptions of both automated and manual processes.

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The SBA submits its CFDA updates as outlined in the OMB guidance, Circular A-89. Currently, that process is manual. 10. For each system identified in response to Request No.7, state whether information found in that system is regularly or periodically submitted to any of the government-wide grants management and reporting systems, e.g., F AADS, F AADS PLUS, etc., and describe how and at what intervals those submissions occur, including descriptions of both automated and manual processes. For each grant awarded, PRISM creates an information file which is uploaded to USASpending.gov. The data submitted includes the CFDA program number, recipient name, DUNS number, type of recipient, funding amount, and other budget and accounting information about the award. 11. For each system identified in response to Request No.7, describe recent, current, and planned migration or modernization projects. There are no modernization projects current or planned for PRISM at this time. Modernization projects for the Loan systems and for the JAAMS administrative accounting system are described at No. 5, above. 12. In addition to your agency's submissions to government-wide grants management and reporting systems, described in response to Requests Nos. 9 and 10, does your agency publish any of the same information online for public viewing? If so, describe how and in what format that information is published. The SBA does not publish any of the same information for grants online for public viewing. SBA publishes several loan reports on a quarterly basis online (www.sba.gov/performance) for public viewing. All reports are published in PDF. Reports #2 and #3 are also available in Excel.

Unpaid Principal Balance by Program: Reflects the outstanding principal balance at the end of
the fiscal year for the major loan programs and aggregate totals for the small direct, guarantied and pre-credit reform (pre-1992) loan programs. Gross Approval Amount by Program: Reflects the gross dollar amount of loans approved by fiscal year for the major loan programs and aggregate totals for the small programs. Gross approval includes loans that are cancelled in the current and subsequent years. PDF/Excel Number of Approved Loans by Program: Reflects the number of loans approved by fiscal year for the major programs and aggregate totals for the other direct and guarantied programs. PDF/Excel

Purchase Amount by Program: Reflects purchase amounts by fiscal year for the four large
guarantied programs and an aggregate total for the small guarantied programs.

Charge off Amount by Program: Reflects amounts charged off by fiscal year for the major
loan programs and aggregate totals for the small direct and guarantied programs.

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Total Recovery Amount for Guarantied Programs by Program: Reflects total recoveries for
the four large guarantied programs and an aggregate total for all of the small guarantied programs.

Post-Charge Off Recovery Amount by Program: Reflects total post-charge off recovery
amounts by fiscal year for the major loan programs and aggregate totals for the small direct and guarantied programs.

Purchase Rates as a Percent of Unpaid Principal Balance (UPB) Amount by Program:
Reflects purchase rates, as a percent of the UPB amounts, at the end of the fiscal year for the four large guarantied programs and an aggregate total for the small guarantied programs.

Charge Off Rates as a Percent of Unpaid Principal Balance (UPB) Amount by Program:
Reflects charge off rates, as a percent of the UPB amounts, at the end of the fiscal year for the major loan programs and aggregate totals for the small direct and guarantied programs.

Total Recovery Rates for Guarantied Programs by Program: Reflects total recovery rates, as
a percent of the purchase amounts by purchase year, for the four large guarantied programs and an aggregate total for the small guarantied programs.

Post-Charge Off Recovery Rates by Program: Reflects total post-charge off recovery rates, as
a percent of the amounts charged off by charge off year, for the major loan programs and aggregate totals by charge off year for the small direct and guarantied programs. SBA also publishes three loan reports in HTML format that are available on our archive site. The reports are: Business Loan Detail report (archive.sba.gov/loans/businessdetail): This report is updated monthly and provides detailed loan data by state for guaranteed loans approved from FY 2007 through FY 2011 YTD. Business Loan Report (archive.sba.gov/loans/business): This report is updated monthly and provides FY 2011 YTD summary loan data for SBA’s regions. Disaster Loan Report (archive.sba.gov/loans/disaster): This report is updated monthly and provides loan data by state for direct disaster loans approved from FY 2006 through FY 2011 YTD. 13. Identify and briefly describe each system that your agency uses to manage contracts. If separate divisions, bureaus, or offices of your agency use separate systems, identify which divisions, bureaus, or offices use each system. The SBA uses the PRISM system for contract management. PRISM is a commercial off-theshelf package purchased from Compusearch that is used to manage contracts and grants at the SBA. All SBA divisions use the same contract management system.

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14. For each system identified in response to Request No. 13, explain how it interacts with any business or accounting system identified in response to Request No. 1. Purchase requests are entered and approved in the SBA’s JAAMS administrative accounting system to provide for the commitment of funds for an acquisition. Purchase requests approved in JAAMS are interfaced to PRISM daily. PRISM is used to manage and report on status of the acquisition through the solicitation and award processes. Once a final award is approved, the amount of the award is manually entered back to the JAAMS system where funds are fully obligated and expended. 15. For each system identified in response to Request No. 13, state whether information found in that system is regularly or periodically submitted to any of the government-wide contract management and reporting systems, e.g., FPDS, FPDSNG, F APIIS, etc., and describe how and at what intervals those submissions occur, including descriptions of both automated and manual processes. For each completed award greater than $3,000 released in PRISM, a web service is used to upload data about the award to FPDS-NG. Because PRISM does not contain all of the data required by FPDS-NG, some manual entry to FPDS-NG is required to complete the information requirement. 16. For each system identified in response to Request No. 13, describe recent, current, and planned migration or modernization projects. There are no major modernization projects current or planned for PRISM at this time. 17. In addition to your agency's submissions to government-wide contract management and reporting systems, described in response to Request No. 15, does your agency publish any of the same information online for public viewing? If so, describe how and in what format that information is published. The SBA does not publish any of the same information online for public viewing.

18. Briefly describe your agency's efforts to comply with OMB's memorandum on the Open Government Directive - Federal Spending Transparency, dated April 6, 2010. In particular, describe whether and how your agency has begun to collect and report sub-award data, as required by the memorandum, and describe how your agency's reports on OMB's data quality metrics, as required by the memorandum, are generated. The SBA has completed and updated its data quality plan and continues to define data quality metrics, in coordination with OMB. The largest volume of SBA spending information submitted to USASpending.gov is on loan information, which is currently exempt from the sub-award reporting requirements. 19. If your agency interacts directly with USASpending.gov, in addition to submitting information to the systems that feed USASpending.gov, describe the nature, frequency, and purposes of that interaction.

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As described at No. 10 above, grants information is directly submitted to USASpending.gov as each award is made. Loan approval and adjustment data is automatically generated from the LAS system and submitted to USASpending.gov on a monthly basis.

20. Describe the data quality controls and procedures that your agency has implemented for information that is submitted to USASpending.gov, including information submitted directly and information submitted to one of the systems that feeds USASpending.gov. The SBA has developed a Data Quality Plan for the Open Government Directive, which is in the process of implementation. The plan addresses the information required for grants, loans, contracts, and Surety Bond Guarantees data. A copy of the complete plan is available upon request.

21. State whether all of your agency's current grants, contracts, and loans are accurately reflected on USASpending.gov, and, if not estimate the percentage of current grants, contracts, and loans that are not accurately reflected, using both the number of transactions and dollar figures. The SBA is aware that the accuracy of the information on USASpending.gov needs improvement. It has identified the ways in which it seeks to improve this in its data quality plan, and the agency is working to implement those improvements, including a means to correctly identify the current gap in data accuracy. 22. State whether your agency incurs any reporting burdens or costs as a result of its obligations under the Federal Financial Assistance Transparency Act ("FF ATA") that it does not incur as a result of other reporting obligations, and estimate those burdens and costs in worker-hours and dollars. The SBA has not identified a specific dollar amount related to the reporting burden, but it recognizes that there are many manual and duplicative reporting processes in addition to FFATA. 23. Identify the individual(s) who serve(s) as Senior Accountable Official(s) ("SAO") over federal spending data quality for your agency, as defined by OMB. The Chief Financial Officer serves as the Senior Accountable Official(s) ("SAO") over federal spending data quality for your agency, as defined by OMB.

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