INS officials tell of bumpy road to financial management success

It took the Immigration and Naturalization Service five years to restructure its financial management process, but the effort earned the agency its first clean audit in fiscal 2001.

"If you want to try something that will try every bit of your patience…I can think of nothing more difficult than putting a new financial management system in place," INS Executive Associate Commissioner for Management George Bohlinger said last week at a briefing sponsored by Savantage Solutions Inc., the firm that helped the INS develop its recently implemented financial management system. The new system provides managers with real-time access to financial data.

At the briefing, Bohlinger, Judy Harrison, head of the INS' Office of Financial Management, and Bud Rubenstein, director of financial operations at the agency, shared details of the INS' difficult path to a clean audit.

The 1996 Federal Financial Management Improvement Act, FFMIA, requires agencies to produce timely and reliable financial statements. If an agency believes its systems are not FFMIA-compliant, it must develop a remediation plan to achieve compliance within three years. The year FFMIA was enacted, auditors declared the INS' financial statements "unauditable."

"Auditors were running around trying to find information and we couldn't give it to them or tell them where to find it," said Harrison, who joined the agency in 1996.

Bohlinger, who also joined the INS in 1996, discovered there was no clear vision for addressing the agency's financial management problems. After assessing the situation, he and others realized that INS needed to change financial processes, not just set up a new system. "We understood in the very beginning…that it's far more important to change your business practices than change your software," Bohlinger said.

INS brought in Rel-Tek, which later became Savantage, and began untangling the financial mess the agency had created over the years. "The system would have been of little value if we had not gone through and cleaned up all of the data," Harrison said.

Bohlinger and crew spent the next few years redefining the relationship between the agency's headquarters and field offices. They set up an office in Texas for accounts payable, an office in Vermont to collect money and an operation in Minnesota to handle payroll management. INS reduced its late payment fees by identifying recurring payments and hounding program officers for the invoices and approvals needed to pay the agency's debts on time.

"We used proactive follow up-'Why haven't you sent us this, why haven't you approved that?" Rubenstein said.

About a third of the INS' funding comes from the fees it collects for providing immigration services, some of which are levied on airlines providing international service. When the agency started auditing the airlines to ensure they were paying all required fees, it collected an additional $43 million, Harrison said.

In fiscal 2003, all immigration offices at U.S. ports of entry will be able to accept credit cards. Under the new financial management system, purchase requests from offices with exhausted budgets are denied. "If you have no money, it in essence breaks the computer," Bohlinger said. "No longer can you buy something for which you have no money."

The INS has also tackled the issue of travel card abuse by employees. The 1998 Travel and Transportation Reform Act requires federal employees to use government charge cards for travel expenses. In most cases, the agency reimburses the employee for travel expenses and the employee pays the charge card bill. But some employees fail to make timely payments. A year ago, the INS began garnishing the wages of employees who were delinquent on their accounts.

"We're recovering a lot of debt that had been written off by the bank," Rubenstein said. "But we're also trying to stop it on the front end. Each month we send a letter to managers giving them the status of their employees' accounts."

The road to fully effective financial management is still bumpy. A 2001 report by the Justice Department's inspector general criticized the amount of money the INS had to spend to get a clean audit in fiscal 2001. Harrison admitted the agency is still trying to overcome problems in accounting for all of the fees it collects for applications that haven't been processed by the end of the year.

Bohlinger lauded the agency's success to date.

"We realized at INS that anything is possible," Bohlinger said. "INS can now close its books in one day. This is a sign of accomplishment. People should be standing up and throwing confetti."