AOC Solutions is a federal financial management consulting firm that works exclusively with federal agencies and entities. Their team of experts use technology to optimize financial performance by providing services such as financial reporting, accounting, financial management, financial systems implementation, and audit remediation. AOC has been listed as one of the fastest growing private companies by Inc. 5000 for six consecutive years.
A federal agency, with more than $5 billion in annual appropriations, discovered its financial systems were not properly processing travel obligations, payments and advances. While the process itself was not material to the financial statement audit, it was cumbersome to plan, manage and execute. Managers lacked access to information they needed to identify problems, formulate plans and monitor the execution of process changes.
AOC Solutions was contracted to support the agency’s audit remediation and change management efforts. Once onsite, AOC documented the travel process flow, event by event and system by system. Using IDEA, AOC simultaneously analyzed five years of data from three separate systems. Capturing the management process was essential to understand where business and accounting events occurred. The team worked to define the overall processes to address potential issues such as poor financial data, non-compliant accounting, weak funds control, and absent management information.
AOC used IDEA to analyze nine million records of human resource, travel general ledger data. Initial findings revealed several exceptional processes which produced transactions, but were not captured in the management review. These were recorded in one or two of the systems, but not the other systems. The analysis also identified payments without recorded budgetary obligations, and many budgetary obligations that did not result in payments. It showed the obligation amounts were generally skewed 30% lower than the actual payments, which created variances within the funds control environment. AOC found that many source records were regularly deleted each year, and multiple duplicate source records that were treated as separate events.
Additionally, analysis of the general ledger (GL) data revealed that accounting had not complied with the Department of Treasury’s required GL transactions and accounts. The process owner was unable to see the significant number of process transactions within the financial system.
Working closely with the client, AOC Solutions crafted a process reengineering plan to address each of the major issues in detail. The implementation included regression analysis, remediation and an automated subsidiary ledger to record, process and support process transactions.
With IDEA, we not only met the engagement requirements, but we exceeded their expectations. Sometimes we’re called upon to fix a specific set of problems, but when we see an opportunity to streamline and automate processes, it adds value the client may not have even thought possible.
The results of these efforts were immediate and substantial. Travel obligations were recorded with reasonable estimates that allowed program managers to plan and allocate resources with greater accuracy. The client was able to verify $15 million worth of invalid annual travel obligations, which had been recorded as valid at one point. Financial managers liquidated the obligations and reallocated the budget to other current year uses.
By using IDEA to automate the manual entry process for 75,000 annual transactions, the client was able to reallocate five full-time equivalent staff positions to have them focus on higher value work. The automated process also eliminated delays in recording transactions in the system, which eliminated a $30 million journal voucher improving financial reporting.
Management reports were provided weekly to financial and program managers, which allowed them to identify and respond to issues in a timely manner and maximize the use of limited budget authority to meet program goals. AOC applied their expertise and use of IDEA to save time, effort and strengthen organizational processes.
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