U.S.

Department of Labor
The Honorable Darrell E. Issa
Office of the Chief Financial Officer
Washington, D.C. 20210
MAR 2 3 2011
Chainnan, Committee on Oversight and Government Refonn
The Honorable Todd R. Platts
Chairman, Subcommittee on Government Organization, Efficiency and Financial Management
The Honorable Jim Jordan
Chainnan, Subcommittee on Regulatory Affairs, Stimulus Oversight and Government Spending
The Honorable James Lankford
Chainnan, Subcommittee on Technology, Infonnation Policy, Intergovernmental Relations and
Procurement
U.S. House of Representatives
2157 Rayburn House Office Building
Washington, D.C. 20515
Dear Chairmen:
Thank you for your March 8,2011, letter regarding the Department of Labor's (DOL) financial
management systems. On behalf of DOL, I am pleased to provide the following responses to the
Committee's enumerated requests.
1. Identify and briefly describe each of your agency 'sbusiness and accounting systems. If
separate divisions, bureaus, or offices of your agency use separate systems, identify which
divisions, bureaus, or offices use each system.
Since 2010, the Department's core financial system has been the New Core Financial
Management System (NCFMS). NCFMS has direct, near-real-time interfaces to the E2 Travel
System, the Electronic Procurement System (EPS), and the grants management system (E-
Grants).
2. Explain how the business and accounting systems identified in response to Request No.1
interact with one another.
NCFMS has direct, near-real-time interfaces to the E2 Travel System, to record and issue travel
authorizations and voucher payments; the E-Procurement System (EPS), to record financial
transactions associated with purchase orders and contracts; and the E-Grants system, to record
financial transactions associated with grants issuance.
3. For each system identified in response to Request No.1, state whether informationfound 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 L FACTS 11, IFCS, etc., and
explain how and at what intervals those submissions occur, including descriptions of both manual and
automated processes.
Information residing in NCFMS is reported to the Department of Treasury's ("Treasury") government-
wide accounting systems at prescribed intervals. For each of the quarterly FACTS I, FACTS II, and
IFCS submissions, an automated process is used to generate a report or bulk file that is reviewed,
manually adjusted, and then transmitted to the respective accounting system. For the yearly
submission of the Closing Package into GFRS, NCFMS generates a report that is used to manually
enter information into various modules in GFRS. DOL agencies use their program systems to generate
data to complete the Treasury Report on Receivables (TROR) quarterly reports in the Treasury's Debt
Management Information System (DMIS).
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")
lvIAX Information System, and explain how and at what intervals those submissions occur, including
descriptions of both automated and manual processes.
NCFMS generates trial balances and reports which are used to compile DOL's financial statements and
footnotes on a quarterly basis for the first, second, and third quarters for interim financial statements
and annually for the Agency Financial Report (AFR). The quarterly financial statements and footnotes
and AFR are submitted to the OMB MAX Information System. Both automated and manual processes
are used to cross-walk data from trial balances and reports to comply with the required form and
content of the interim financial statements and annual financial statements and footnotes. The
quarterly submissions also require variance analyses which we prepare using manual processes.
Treasury compiles certain of our budgetary information with that of other agencies and submits this
information to OMB's MAX system. Annually, DOL also reports in MAX certain performance
measures on improper payments, including outlay dollars, improper payment percentages (for over-
and underpayment), and projected improper payment dollars. This data is compiled through the use of
special studies and statistical sampling methods, except for the Unemployment Insurance program,
where data is reported by the States and compiled by the Employment and Training Administration.
5. For each system identified in response to Request No.1, describe recent, current, and planned
migration or modernization projects.
DOL has no additional planned migration or modernization projects for NCFMS. DOL is focused on
system stabilization and normalizing operations.
For the E2 Travel System, DOL's only planned migration is in response to, and in conjunction with,
GSA's recompete ofthe basic contract providing government-wide travel services.
DOL is conducting a competitive procurement to acquire an electronic procurement system to replace
EPS. Depending on funding availability, DOL anticipates awarding the contract in FY 2011.
DOL plans to modernize the E-Grants system by deploying a fully redundant system at an
emergency location. This enhancement would provide DOL the ability to continue grant
operations if E-Grants servers in the Frances Perkins Building were to go down for an extended
period of time.
6. In addition to your agency's submission to government-wide accounting system
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 onlinefor public viewing?
If so, describe how and in what format that information is published.
The Agency Financial Report (AFR) and the Summary of Performance and Financial
Information Report are published on DOL's website. The FY 2010 AFR is at:
http://www.dol.gov/ sec/media/reports/annual201 0/201 Oannualreport.pdf
The FY 2010 Summary of Performance and Financial Information Report is at:
http://www.dol.gov/ sec/media/reports/2010summarylFY2010PerformanceSummary.pdf
On a quarterly basis, DOL also publishes information for other Federal agencies' use in reporting
their expenses and liabilities associated with workers' compensation costs of current and former
Federal employees under the Federal Employees' Compensation Act (FECA) and unemployment
benefits under the Unemployment Insurance program. These reports are at:
http://www.dol.gov/ocfo/publications.html.
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.
DOL operates E-Grants as its single grants management system for its various grant programs
within seven agencies. E-Grants supports more than 1,000 users in DOL's national and regional
offices and serves approximately 6,000 domestic and international grantees. E-Grants supports
the complete grant lifecycle which includes pre-award, award, post-award, and closeout
management.
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.
E-Grants interfaces with the E-Procurement System and NCFMS. E-Grants uses the E-
Procurement "shopping cart" electronic approval functionality for fund approvals for new
awards and to initiate modifications to existing awards.
Once a requested action is reviewed and approved, E-Grants interfaces with N C F ~ S . The
approved funds are electronically recorded in NCFMS followed by an electronic
interface/transfer to the Health & Human Services Payment Management System (PMS). Once
the funds are posted in the PMS system, they are available for the grantee to draw down.
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.
DOL complies with the CFDA requirements through annual reviews of the CFDA content and
registration of new programs as needed. Financial data reported for grants to USASpending.Gov
is properly tagged with the CFDA catalog numbers.
10. For each system identified in response to Request No. 7, state whether informationfound
in that system is regularly or periodically submitted to any of the government-wide grants
management and reporting systems, e.g. FAADS, FAADS PLUS, etc. and describe how and at
what intervals those submissions occur, including descriptions of both automated and manual
processes.
The Federal Assistance Award information is submitted monthly to www.USASpending.gov via
the Data Submission Validation Tool in the requisite F AADS+ format.
The use of the Census Bureau's FAADS system was terminated effective February 10,2011,
pursuant to the OMB bi-weekly report to the Chief Financial Officer Council (CFOC) and
Council of Inspectors General on Integrity and Efficiency (ClGIE) communities.
11. For each system identified in response to Request No.7, describe recent, current, and
planned migration or modernization projects.
Please see the answer to Request No.5.
12. In addition to your agency's submission to government-wide grants management and
reporting systems, described in response to Request 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 Department is in the process of developing a website with grant data; however, this website
is not yet functional.
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.
DOL utilizes EPS to generate and award its contracts. Authorized users initiate a procurement
requisition in the system, which is submitted to the requisitioner's management approval chain
for approval and subsequently routed to the agency's servicing budget officer who certifies that
funding is available. Ifbudget approval is granted, the action is transmitted to the servicing
contracting office for processing. EPS also contains the appropriate Federal Acquisition
Regulation (FAR) contract clauses that are required for DOL contracts. DOL updates the system
to incorporate new or revised FAR clauses.
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.
EPS has a direct interface to NCFMS. EPS transmits financial commitment and obligation
information to NCFMS.
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, FPDS-NG, FAPIIS, etc., and describe
how and at what intervals those submission occur, including descriptions of both automated and
manual processes.
EPS has the capability to transmit data to the Federal Procurement Data System-Next Generation
(FPDS-NG). As contract actions are awarded, DOL acquisition personnel regularly submit
award data from EPS to FPDS-NG.
16. For each system identified in response to Request No. 13, describe recent, current, and
planned migration or modernization projects.
Please see the answer to Request No.5.
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.
DOL publishes Service Contract Inventory and Annual Acquisition Procurement Plan and
Forecast documents on the DOL website. Additionally, American Reinvestment and Recovery
Act data is made available on DOL's website, as well as the USA Spending andOMB MAX
websites.
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 OivfB's data quality
metrics, as required by the memorandum, are generated..
In accordance with the FAR, reporting sub-award data is a prime contractor's responsibility.
DOL contracting offices have been provided guidance directing the use of FAR clause 52.204-10
in relevant DOL contracts.
For grants, DOL awards on or after October 1, 2010, include the requirement for sub-award
reporting which was published in the Federal Register on September 14, 2010. DOL grant
officers have also been directed to incorporate the sub-grantee reporting requirement in
appropriate grants.
With regard to compliance with OMB's data quality metrics, DOL is participating in an OMB
workgroup to develop date, quality standards to address agency reporting on timeliness,
completeness, and accuracy. DOL expects to implement these standards once they are finalized.
19. If your agency interacts directly with USASpendinggov, in addition to submitting
information to the systems thatfeed USASpendinggov, describe the nature, frequency, and
purposes of that interaction.
DOL Federal assistance award data (i.e., grants and cooperative agreements) is manually
uploaded via the USASpending.gov Data Submission and Validation Tool on a monthly basis.
The infonnation is collected from DOL's E-Grants system and then manually uploaded. The
purpose of this transmission is to publically post the required information.
DOL Contract data is reported directly to USASpending from FPDS-NG.
20. Describe the data quality controls and procedures that your agency has implemented for
information that is submitted to USASpendinggov, including information submitted directly and
information submitted to one of the systems that feeds USASpendinggov.
DOL data quality controls include requiring data verification by an official one level above the
contract specialist to validate the accuracy of data contained in FPDS-NG, a feeder system to
USAS pending. 2:OV.
In addition, DOL participates in the annual OMB FPDS Data Quality exercise whereby random
sampling of all FPDS records are subjected to a thorough and supplemental review of the
contract file to identify any specific errors and negative trends in data quality.
Further, DOL participates in the Small Business Administration's (SBA) annual SBA FPDS
Anomaly exercise. The SBA identifies any potential anomalies in the Contracting Officers'
business-size determination in the FPDS records. DOL then conducts an extensive evaluation of
each potential anomaly in an effort to identify and correct any errors.
21. State whether all of your agency's current grants, contracts, and loans are accurately
reflected on USASpendinggov, 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 .
A recent review of DOL contract data contained in FPDS-NG revealed an estimated 96 percent
accuracy rate for FY 2010. The Department is taking appropriate steps to account for and report
the remaining estimated 4 percent.
22. State whether your agency incurs any reporting burdens or costs as a result of its
obligations under the Federal Financial Assistance Transparency Act ("FFATA ") that it does
not incur as a result of other reporting obligations, and estimate those burdens and costs in
worker-hours and dollars.
DOL's E-Grants system does not provide for a direct reporting link to USASpendng.gov.
Therefore, an additional burden is placed on staff to collect data from the E-Grants system and
format the data as required by the Data Submission and Validation Tool. Approximately 10
hours per month is spent exclusively on the process of formatting and uploading the data.
Additionally, the quality review standards for FF AT A data are currently being formulated by
ONIB and the vast majority of the grant agreements for the Department were awarded prior to the
implementation of FF A T A. Therefore, the actual costs and burden are not yet known.
At this time, the estimated cost of the burden is approximately $668,400, or approximately 6.5
full-time equivalent positions.
23. Identify the individual(s) who servers) as Senior Accountable Official(s) ("SAO 0) over
federal spending data quality for your agency, as defined by OJYfB.
I am DOL's Senior Accountable Official.
If you have any questions regarding DOL's response, you may contact Patrick Findlay in DOL's
Office of Congressional and Intergovernmental Affairs at 202-693-4600.
Sincerely,


V,efFinancialO lcer
cc: The Honorable Elijah E. Cummings
Ranking Member, Committee on Oversight and Government Reform
The Honorable Edolphus Towns
Ranking Member, Subcommittee on Government Organization, Efficiency and Financial.
Management
The Honorable Dennis Kucinich
Ranking Member, Subcommittee on Regulatory Affairs, Stimulus Oversight and
Government Spending
The Honorable Gerry Cormolly
Ranking Member, Subcommittee on Technology, Information Policy, Intergovernmental
Relations and Procurement