OPM drops effort to shift financial management to Treasury bureau

A much-touted effort to move the Office of Personnel Management's back-end financial management operations to the Bureau of Public Debt's Administrative Resource Center has collapsed.

In an announcement released last week, OPM officials said they will conduct a public-private competition to determine the best place for the agency's financial management and procurement operations. The contest will take place by the fourth quarter of fiscal 2007, which begins July 1.

As part of a consolidation effort known as the lines of business initiative, the Office of Management and Budget generally requires agencies that want to change or upgrade their financial management systems to move either to an agency-run shared service provider or to a qualified private sector provider. OPM's competition will be held according to financial management lines of business guidelines released in September.

The competition will result in the selection of a public or private sector shared service center that has experience operating technology that is certified by the General Services Administration's Financial System Integration Office.

OPM selected the Treasury Department's Bureau of Public Debt -- which is on a list of OMB-approved shared service providers -- to run its financial management systems in August 2005. The transition was scheduled to be complete in 2007, but last week's OPM announcement stated that the effort to "implement a tailored solution" was canceled.

With 5,000 employees, OPM would have been one of the largest agencies to turn to a government shared-service center for its financial management needs.

Peter Hollenbach, a spokesman for the Bureau of Public Debt, said the decision for OPM to fulfill its financial management needs elsewhere was mutual. The bureau's administrative resource center, located in Parkersburg, W.Va., currently provides service to 63 small government agencies and employs about 500 people.

"Basically, our administrative resource center was defining the requirements and we discovered that [we were not] the best match for their needs," Hollenbach said.

Tabetha Mueller, spokeswoman for the House Government Reform Subcommittee on Government Efficiency and Financial Management, said the Bureau of Public Debt did not have the capacity to handle OPM's financial management system.

"OMB took a model that was working for these smaller bureaus and agencies and extrapolated it to something that was probably impossible," Mueller said. "This has definitely thrown a wrench into things. This was to be the test case. This was what everyone was touting as 'Let's see how this goes.'"