Project Expenditure Organization Expenditure Type Expenditure Date and

Project, Expenditure Organization, Expenditure Type, Expenditure Date, and Task (POEET) Educational Campaign Presented by: Debbie Fountain, NIH Business System (NBS) Date: 3 -25 -2015 Simplified Acquisitions Committee Meeting

What is POEET? 5 key data elements make up POEET and are directly linked to the Accounting Classification Structure (ACS) which classifies all procurement transactions processed in the NBS. § Unlike your own checkbook, every monetary transaction entered in the NBS becomes visible for all to see and must be categorized! – Project Number: …. is analogous to your bank account number (s). • The Project Number is tied to the ACS segment values that indicate the operating budget account……where the money comes from and how it is to be spent. – Expenditure Organization: …. analogous to “you” and your “family” as the spenders of your money. • Represents a subgroup of an organization, (e. g. , HNM 2, HNM 3) that falls under the primary organization to which the operating budget is issued (e. g. , HNM 1). • Data reporting to the Office of Management and Budget (OMB) comes from the primary organization (HNM 1) while the subgroups provide reporting information at the NIH org level. – Expenditure Type: …. analogous to the categories/sub categories you might spend your money on. • Expenditure type defines the types of goods/services you are purchasing and is used to derive the object class code (OC). – Expenditure Item Date: …. analogous (typically) to the date you spend your money. • Expenditure Item Date represents the date of the purchase and it should reflect the correct funding year to be used to support the purchase of the goods or services. This date field defaults to the current date in which the order is entered. – Project Task: The project task number is “ 1” for all purchases except for capital planning projects. • Additional task numbers may be assigned to various phases of a capital planning project such as a major renovation or building a new building. 2

Background: POEET Educational Campaign § The POEET Educational Campaign – What is it? – § § § An NIH-Wide educational effort supported by the Deputy Director of Administrative Management, NIH Business Owners, NIH Business System and IC Executive Officers; – Provision of information to the NIH acquisitions and finance communities for a greater level of awareness of the importance of accurate data entry during the Procure-to-Pay process cycle; – Provide an understanding of the legal implications as noted in Appropriations Law (31 U. S. C 3528) as it refers to certifying officers and their responsibility for the legality of proposed payments as well as for the illegal or improper payments resulting from their certifications. Why Now? – Increased scrutiny of the way in which Federal funds are utilized across the government, – Software that supports the NBS is being updated and will further support a move toward greater financial transparency, better internal controls and financial accountability to track and validate federal fund expenditures at the Department level – Places a heightened level of accountability on the NIH workforce, requiring a deeper level of understanding to support accurate, upfront financial classification of all monetary transactions in the NBS through ……input of correct POEET data elements! Audience? – Acquisition and budget/finance staff involved in requisitioning, acquisition approving and/or financial certifications and those individuals involved with and responsible for accurate and correct data entry into the system as well as accurate reporting on expenditures. Educational Objective? – An increase in the accuracy of data entry, starting with the requisition process, helping to prevent downstream implications such as: • Inaccurate data entry that would interfere with processing transactions; • Possible financial disbursement impacts; • Data reporting not reflective of the true state. 3

POEET Data in NBS (Oracle i. Procurement) and ACS Data Mapping § Once the order is electronically pushed from the POTS or AMBIS into the Oracle i. Procurement or manually entered into the i. Procurement form, the ACS information is mapped into the respective fields in Oracle. 4

POEET and the Accounting Classification Structure (ACS) Data entry and verification of POEET data is crucial for successfully processing a transaction request and to ensure that accurate invoicing, payment, and reporting occurs. POEET elements map behind the scenes to a higher granularity of categorization, the ACS. 5

What are the Accounting Classification System (ACS) Segments? 6

ACS Chain for a PRISM Award § The Accounting Classification Structure (ACS) chain in PRISM for this award reflects the entire 14 segments; these data elements are what drives the transaction through the Procure to Pay process within the NBS § Each of the 14 data segments represent a key reporting indicator financial and budgetary tracking and reporting 7

Manual Interventions are Required When POEET Data is Entered Incorrectly Approximately 10, 000 Project /CAN Changes were processed through the Office of Financial Management (OFM) in FY 2014 § OFM reports the following scenarios for which the wrong Project /CAN was charged during an acquisition process: − − − § Charges are associated with a reimbursable Project/CAN where funds have not been allocated or are not yet available. Requestors mistakenly place orders with multiple lines and allocated only one Project/CAN when there should be multiple Project/CANs charges. Requestors will copy and paste information from screens and in doing so a Project/CAN (and other POEET elements) from a prior transaction may be incorrectly used. During the procurement process, it is overlooked that the Project/CAN being used is no longer valid. Utilization of a “default” CAN via a profile set up or other default settings did not accurately support the transaction. A single Project/CAN change request, if submitted with all documentation, takes 20 minutes to process at OFM. How long does it take your IC to discover the error and pull the supporting documentation to support the Project/CAN change request? 8

Consequences of Defective Data Examples of downstream (after a transaction has passed through the system) implications resulting from of flawed POEET data and inadequate data validation. § Project/CAN: – Should the wrong Project/CAN be selected and the error is not caught, the transaction(s) will: • process incorrect accounting data into Oracle i. Procurement; • will reduce available funding associated with the incorrect Project/CAN organization, potentially affecting continuation or completion of work due to unavailable supportive funds; • Require a Project/CAN change request can only be processed by OFM after the funds have obligated and/or disbursed. – this ties up the those funds until the change request is processed. § Expenditure Type: – Should the wrong Expenditure Type be selected, such as 2512 for Consulting Services rather than 3141 for ADP Hardware Equipment, and the error isn’t caught, – the transaction will result in: • the inability to properly decal a property item, • significant delay in property delivery to the end user, • and an inaccurate accounting of property for reporting purposes. 9

Transparent Spending § The USASpending. gov website increases the need to scrutinize our data to support: • Data Quality: Improving data integrity …making sure our transactions are being coded correctly. • Completeness: Expanding the focus to include obligations and expenditures…. tracking our spending at a given point in time as we prepare to spend. • Functionality: Providing a one-stop location for all Federal spending…making sure the citizens of the United States can see exactly how their money is spent. • Utility: Linking spending information to program activity…. knowing who is spend what. 10

HHS Award Posted to the USA Spending. gov website Visitors to the USA Spending website locate contracts and other monetary awards issued by Federal agencies. The details of these awards are readily available to the public. 11

Who are the responsible players in the Federal procurement process? NIH Employees play a significant role in ensuring that all procurement requests submitted to the NBS in order to conduct official business are legitimate, legal, and accurate. § Merit Systems Principle number 4 asserts: “All employees should maintain high standards of integrity, conduct, and concern for the public interest. In order for an agency to accomplish its mission, its employees’ conduct must command the respect and confidence of the public. ” § Whether the role in the processing of a procurement transaction through the NBS is one of requestor, releaser, approver, purchasing agent, card approving official, etc. , a Certifying Officer relies primarily on the checks and balances (the people) within the ICs to ensure that accurate financial data is input into the NBS. − Therefore, all users, regardless of their role in the Procure-to-Pay process, must recognize the importance of their responsibility to input accurate POEET data and to ask questions when necessary to ensure that the transactions that flow through the NIH Business Systems (NBS) are correct. 12

Who are the responsible players in the Federal procurement process? (cont’d) NIH Certifying Officers play a significant role in the accountability for public funds. Appropriations Law (31 U. S. C 3528) states: § A certifying officer is a government officer or employee whose job is or includes certifying vouchers 1 (including voucher schedules or invoices used as vouchers) for payment. A certifying officer differs from other accountable officers 2 in one key respect: the certifying officer has no public funds in his or her physical custody. Rather, accountability is statutorily prescribed because of the nature of the certifying function. A certifying officer’s liability, is established by 31 U. S. C. § 3528. In brief, certifying officers are responsible for the legality of proposed payments and are liable for the amount of illegal or improper payments resulting from their certifications. 1 Payment vouchers of all types 2 Authorized funds approvers 13

Where can I go to validate POEET data? • Use the n. Vision website to locate the n. Vision reporting launch page. Click on the Helpful Look -ups link located to the left of the page. It is not necessary to register with n. Vision in order to obtain these specific helpful lookup reports for your respective IC. • Utilize the Reference Materials at the end of this presentation. 14

Project /CAN Status Report § • Important ACS elements can be verified by launching the n. Vision Helpful Look-Up “Common Accounting Numbers” Provides info on the status of the Project numbers and other important data elements being used for the transaction. 15

Leadership Support § As NBS prepares activities for the community, encourage appropriate staff level participation. NBS will inform you, in advance, of upcoming events to targeted staff. § Consider the importance of accurate data entry within your own IC and the return on investment of an upfront understanding of the data associated with various System transactions. § Develop clear ownership and responsibilities associated with accurate transaction data entry within your IC. 16

Summary …multiple players in the procurement process § all serve a critical role in insuring that the financial data elements entered to support transactions are valid. Data errors with respect to § Project Number, § Expenditure Organization, § Expenditure Type, § Expenditure Item Date, and § Task (POEET) entered at the beginning of the requisition process are § extremely time consuming and difficult to fix once a transaction has been submitted and approved in the NIH Business System (NBS). Be proactive, educate, review and validate data, catch these problems before they get started! 17

POEET Educational Campaign Moving Forward Communication Efforts: Already done § High level comms (overview of the effort) to EO, BO, IAMC, EAMC etc. . targeted for December/January 2014 In Progress § Staff level comms (detailed presentations/forums tailored to the specific audience) targeted to begin in Jan running through May 2015 Moving Forward § Town Hall forum will be offered to all business staff, targeted for May 2015. 18

Questions 19

Appendix

Reference Materials - Acquisitions § Helpful n. Vision Look-Ups (no registration required) § Desk Manual: Buyer - Acquisitions § Useful n. Vision Acquisition Reports (registration is required) Ø NBS ACS Description Search (NBS-05) Ø Accounting Code Structure (NBS-01) Ø Open Obligations for Cancelling Fiscal Year Funds (ACQ-47) Ø Unpaid Invoices for Cancelling Fiscal Year Funds (ACQ-48) Ø OALM COAC Dashboard Active Portfolio by Award Category (ACQ-15) § Contract Toolbox § NAICS and PSC Look-Up 21

Glossary § § § Accounting Classification Structure (ACS): The combination of the 14 data elements used for categorizing financial transactions along several dimensions that enable retrieval, summarization, tracking and reporting information; these segments combine with other accounting classifications to provide controls and reporting as required by Congress, OMB, Treasury, and the NIH Management. Allotment Org: Allotments are defined within each Fund by the values in Fund Limit and Allotment Org. The Allotment Org identifies the IC to whom an allotment is issued (MF and SSF are allotted to the OD, not the individual centers). BFY: The Budget FY segment of the ACS identifies the fiscal year of apportionment for the transaction. For annual and no year funds, this will be the current fiscal year of operations and the same as the fund year. Multi year funds will have different Budget FY and Fund Years after the initial year to indicate which year of the multi year fund is being cited. Budget Activity: The Budget Activity segment of the ACS is required by DHHS to be structured in a way that supports FARS (CFDA) reporting and both the President’s Budget and Congressional Justification. Expenditure Type: This field is related to the Object Class (OC) Code. CAN: The 7 -digit Project Name which starts with ‘ 8’ is also referenced as the CAN and it is directly tied to a unique Project Number within the NBS. Expenditure Org: This field represents the organizational unit within NIH to which the operating budget is issued. DHHS requires financial systems to align with HR systems using Standard Administrative Codes (SACs). Fund: The Fund segment of the ACS controls the major functions of reporting to OMB and Treasury and defines the funds control levels for budgeting. The OFM will set up new fund segments for all NIH funds at the beginning of each fiscal year. Fund Limit: Allotments are defined within each Fund by the values in Fund Limit and Allotment Org. The Fund Limit segment of the ACS is used to further define the allotment when needed to identify funds for special laws or programs (e. g. , Small Business, Royalty, Diabetes, etc. ). I|E|R: The I/E segment of the ACS indicates whether the use of funds is internal by NIH or external by the research community. Use of this segment provides the NIH with a way to fulfill the DHHS requirement of hard funds control at an allowance level on a consistent basis across all ICs. Line Item: The Line Item segment of the ACS is a catch-all segment that is being used for several purposes during initial deployment. Line Items in the regular appropriation should be carefully evaluated to determine if segments already coded could provide a unique code combination without establishing a new Line Item code (the goal is to minimize use of Line Item). Setting up the Line Item segment occurs rarely and would be at the request of the IC Budget Office. Generally, Gift Funds and CRADAs require new Line Items for each account. 22

Glossary 2 § § § Mechanism: The Mechanism segment of the ACS supports budget reporting at the NIH mechanism table level. Allows optional level of IC detail on mechanism (e. g. , Extramural Program (005), RMS (601), Intramural (506), etc. ). Object Class: This segment of the ACS is designated by DHHS as a 7 character code showing the classification by object of expenditure such as payroll, contract or grant. Values currently mirror the DHHS Object Class Code table , which contains 4 character Object Class values. Organization: This segment of the ACS represents the organizational unit within NIH to whom the operating budget is issued. DHHS requires financial systems to align with HR systems using Standard Administrative Codes (SACs). This means that allowances and operating budgets are issued to a particular office. Setting up the Organization Segment occurs rarely and would be at the request of the IC Budget Office. Project Number: A Project Number is a unique 6 -digit number within the NBS which belongs to a specific operating budget. The expenditures in the project are funds controlled against the allowance to which the operating budget belongs. Theoretically, each project could be assigned one or more tasks. Standard General Ledger (SGL): The SGL provides for tracking funds by proprietary (cash, payables, expenses) as well as budgetary accounts (Commitments, Obligations). This information is used to track transactions and produce financial reports. The SGL Codes will be recorded in Oracle as transactions are posted. Task Number: The project task number is “ 1” for all purchases except for capital planning projects. 23