April 5, 2010 - The U.S. Department of the Treasury and the Office of Management and Budget (OMB) today announced the opening of a new office created to improve and streamline financial management across the U.S. government. The Office of Financial Innovation and Transformation (FIT) will be located in the Treasury Department and will work in collaboration with OMB to reduce costs, streamline processes, and provide better transparency of financial information.
"The President's Budget calls for cost reductions throughout the government that require innovative solutions to significantly reduce costs and improve service," said Dick Gregg, Acting Treasury Fiscal Assistant Secretary. "Through the Office of Financial Innovation and Transformation, all agencies will work closely with Treasury and OMB to chart a new course for financial management."
"It is time to stop the increasing cost of financial operations and systems in the government today," said Danny Werfel, OMB Controller. "The Treasury Department's new office will play a critical role by initiating common, simpler, and lower-cost solutions for basic financial management activities, such as accounts payable and reporting."
By partnering to transform the government's financial management, OMB and Treasury will help to reduce costs and improve quality in financial management across government. At present, the processes that government agencies use to conduct financial transactions and prepare associated financial reports are fragmented, expensive, and inefficient. The FIT office will play a key role in a larger initiative to stem the costs of financial operations - which when fully deployed, will yield hundreds of millions in reduced financial system and operational costs annually. For example, agencies have estimated that they annually spend $750 million processing paper invoices for payments. A modest 20 percent reduction through automation would provide significant savings to the taxpayer once fully implemented.
The President's FY 2011 Budget provides $17 million for the Office of Financial Innovation and Transformation to develop shared, government-wide solutions for agency financial management services including, invoice processing, cash collections and interagency agreement management. This effort will increase efficiency and reduce unnecessary paperwork by offering agencies central automated solutions for transactions processing and financial report production. Treasury's Financial Management Service (FMS) has made great progress in providing electronic alternatives to agencies for funds being paid to the government. Currently 80 percent of the non-tax funds collected by agencies are collected using electronic methods. The FIT will support FMS in converting the remaining 20 percent to an all-electronic process, reducing costs by $40 million each year.