National Partnership for Reinventing Government
(formerly National Performance Review)



February 13, 1996 Vol. 2, No. 3

An Information Sheet for Federal Communicators, Managers, Workers, and Their Partners--Pass It On

OMB Deputy Blesses Business Concepts Proposed by the CFO Council

John A. Koskinen, the Office of Management and Budget's Deputy Director for Management, agrees with many of the proposals set forth by the Chief Financial Officers Council to encourage federal entrepreneurial organizations, including how to better accommodate staffing needs. The proposals apply not only to federal fee-for-service organizations that operate without appropriations, but also to any business-like, performance-based organization within the federal government.
The OMB deputy responded on January 3 to a letter from George Munoz, CFO at Treasury and Executive Vice Chair of the Council. Munoz's letter transmitted a CFO paper, "FTE Support for Entrepreneurial Organizations."
"The 12 standard operating principles for business-like government operations contained in the paper are sound guidance for such activities," Koskinen wrote. "We endorse the goal that agencies seek operational structures that provide the most cost effective solutions to obtain administrative support services while maintaining accountability to agency senior decisionmakers. Business-like organizations should be accountable for results that focus on outputs and outcomes. Federal business-like enterprises are excellent candidates for 'performance-based organizations' and should have a comprehensive set of performance measures to assess each service which is offered."

Staffing Levels for Business-Like Activities
The OMB deputy indicated that federal business-like organizations that can demonstrate the need for additional staff and have identified the funds to pay for staff, should be given the FTEs (full-time equivalents) needed to carry out their business-like operations. These organizations should first request the necessary FTEs within their own agency. If agency FTEs are not available, the organization should seek help from the CFO Council in finding FTEs from other agencies.
If the interagency alternative does not work, Koskinen wrote that "OMB will give favorable consideration to increases in agency FTE target levels to accommodate the needs of the business-like organization."
To get a copy of the CFO paper and the OMB response or for more information, call Laura Chambon at Commerce, (202) 482-2324.

Formula for Success at "The Center": Revenues = Expenses

What is part of the Department of Treasury, deals with nothing but money management, but receives no appropriated funds? It's The Center for Applied Financial Management (The Center). Established in 1991, The Center provides highly skilled financial management experts to agencies of all three federal government branches on a reimbursable basis. The Center's product line includes individualized accounting systems support, consultation and advice, financial system products and services, financial management services, and financial education.
The concept of a multi-dimensional staff of financial advisors providing service through an entrepreneurial mission has paid off in a big way. As a franchising operation that sells its services, it is able to operate without appropriated funds. This pioneering approach has garnered the Vice President's Hammer Award. The Center was also a semi-finalist in the 1995 Innovations in American Government Awards competition sponsored by The Ford Foundation and Harvard University.
To find out more about The Center, contact Laurie Hoard at (202) 874-7037.

Franchising Pilot Applications Are in Pipeline

Applications for the first federal franchising pilots are being processed and decisions are expected within the next few months, according to Clyde McShan, Deputy CFO at Commerce who is the chair of the CFO Council's Committee on Entrepreneurial Government. Six franchise fund pilots were authorized by the Government Management Reform Act of 1994.
A federal franchising operation sells common administrative services like personnel, procurement, or accounting to other federal organizations. "Franchising is a primary means of establishing entrepreneurial government," McShan said. "The franchising agency must be self-sufficient, it cannot use appropriations, and it services must be reimbursable."

Out with Internal Monopolies, In with Competition
"We want to get away from internal monopolies where people are required to use their services," McShan said. "We want competition. That way we get the biggest bang for the buck. A franchising organization is driven to provide quality customer service. An organization must have a good product at a good rate or it will go out of business."

Pilot Evaluation Process Is Nearing Completion
OMB has forwarded applications for the pilots from Commerce, EPA, Interior, Treasury, and Veterans Affairs to House and Senate appropriations and oversight committees for consultation. These applications were favorably evaluated by the Council's committee under a competitive process it developed. Health and Human Services is reworking a proposal and the Federal Aviation Administration sent a very recent proposal that is being evaluated by the Council's committee.
For more information call Laura Chambon at (202) 482-2324.

For more information, contact Pat Wood, National Performance Review, 750-17th St., NW, Washington, DC 20006, (202) 632-0223; FAX: (202) 632-0390; email: The Express is on the Internet at subscribe, send an e-mail message to: Put this message: SUBSCRIBE EXPRESS-L FIRSTNAME LASTNAME. (Put three spaces: after the word "SUBSCRIBE," after "EXPRESS-L," and after your FIRSTNAME.)

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