1). Performance measures that are aligned with strategic goals can  be used to evaluate whether and, if so, how working capital fund  activities are contributing to the achievement of agency goals. JMD Effectively Tracks Working Capital Fund Moneys in Accordance with Fiscal Law and Aspects of Key Operating Principles

		JMD Effectively Tracks Working Capital Fund Functions to Ensure Adherence to Authorized Purposes and Applicable Fiscal Laws

JMD has well-established policies and procedures for tracking and  monitoring each of the four working capital fund functions to adhere to  authorized purposes. This ensures that the funds associated with the four working capital fund  functions are tracked and managed to ensure that they are used in  accordance with its authorities. JMD structures its reimbursable agreements with customers in a way that  facilitates adherence to the Economy Act—the statutory authority  underlying most of the shared services orders received from customers. This allows customers to know who to contact if they have  questions. JMD’s strategy is to recover total cost at the fund level. Customers Noted Positive Benefits of Shared Services but Need More Information on Rates, Costs, and Billing, and More Opportunities for Substantive, Two- way Communication

		Customers Noted Some Positive Benefits of the Working Capital Fund’s Shared Services Provision

During our focus groups and interviews, customers said that they find the  working capital fund’s shared services to be valuable. For example,  customers cited the breadth of services offered as well as the experience  and knowledge of shared services staff as key strengths of the fund. JMD officials explained that each working capital fund staff  director has his or her own way of communicating and interacting with  customers and acknowledged that some may be better at providing  customer support than others. JMD officials expressed surprise at these concerns. They said that  information sharing on rates and rate structures happens regularly on an  informal basis and in forums, such as monthly budget officer meetings,  and that information about the shared services rates is available in  various places depending on the service. Absent a formal mechanism for customers to provide regular,  timely feedback about working capital fund services, JMD cannot  sufficiently assess whether customer needs are being met or have  changed. JMD Does Not Measure the Cost-effectiveness of Its Shared Services

JMD has not assessed its shared services to know whether they provide  a good value to customers, and therefore has not shared information  about the cost-effectiveness of its services with customers. For example, JMD tracks workload measures, such as the number of  personnel actions completed, number of transactions processed, and  computer processing unit hours available. If available, specific working capital fund-level performance information  would allow JMD to regularly compare actual performance with planned  or expected performance. Making adjustments to the fund management  and services, as appropriate, in a corresponding management review  process could help JMD achieve the efficiencies that working capital  funds were designed to produce, potentially freeing up resources that  could be realigned for other departmental initiatives. Performance measures that are aligned with  strategic goals can be used to evaluate whether and, if so, how working  capital fund activities are contributing to the achievement of agency goals  and departmentwide crosscutting initiatives. Justice’s Excess Unobligated Balances Have Been Unavailable for Departmental Priorities in Recent Years

Justice has the authority to capture excess unobligated balances into the  working capital fund and AFF to fund various departmental priorities. These balances are available until expended. 1. 2. 3. However, JMD budget officials told us that the UBT  has not been available for departmental priorities in recent years. Although JMD tracks and monitors limited performance information for  some shared services, it does not have measures to assess how  effectively it manages the fund, such as whether managers are  responsive to customer inquiries or billing error rates—two areas with  which customers have expressed concern. Improve opportunities for two-way substantive communication with  shared services customers. Specifically, he noted that JMD will  continue to explore ways to address the issues we identified. Table 4  shows working capital fund amounts for services and support for “other  services.” Table 5 shows working capital fund amounts for customers  under “all other customers.”

Appendix II: Key Operating Principles for Managing Working Capital Funds

Principle  Clearly delineate roles and responsibilities  Appropriate delineation of roles and responsibilities  promotes a clear understanding of who will be held  accountable for specific tasks or duties, such as  authorizing and reviewing transactions,  implementing controls over working capital fund  management, and helping to ensure that related  responsibilities are coordinated.
Why GAO Did This Study

The Department of Justices (Justice) working capital fund is intended to provide increased efficiencies in how the department funds and offers shared servicessuch as payroll, telecommunications, financial services, mail, and publicationsvalued at over $1 billion annually. Ensuring that the working capital fund is managed as efficiently as possible could allow Justice to use saved resources for other departmental priorities. GAO was asked to determine how Justice (1) manages its working capital fund to promote compliance with applicable fiscal laws and key operating principles, (2) communicates shared services rates with customers, (3) measures performance to evaluate whether fund activities are contributing to agency goals, and (4) ensures that its excess unobligated balances are used in accordance with legal authorities and managed so that Justice can make well-informed funding decisions. GAO reviewed statutory authorities, analyzed Justice policies, interviewed budget and finance officials, and conducted focus groups with some shared services customers.

What GAO Found

The Justice Management Division (JMD), the component responsible for managing the working capital fund, effectively tracks fund functions to ensure adherence to applicable fiscal laws and sound management practices. For example, JMD has well-established policies and procedures for tracking and monitoring the four working capital fund functions so that the fund adheres to authorized purposes. Further, JMD structures its reimbursable agreements with customers to facilitate adherence to the Economy Actthe statutory authority underlying most of JMDs customer orders. JMD also clearly delineates roles and responsibilities, which allows customers to know who to contact with questions and clearly assigns responsibility for obligating and expending funds. Justice also ensures the funds self-sufficiency by recovering total costs for the provided services. These actions are consistent with two of the four key operating principles for working capital funds.Customers noted positive benefits from Justices shared services but seek more information on rate structures and want assurances that fund costs are equitably distributed. For example, customers said they valued the breadth of services offered as well as the experience of fund staff but wanted to better understand the basis for shared services rates and more opportunities to discuss billing concerns and service changes with JMD. Officials expressed surprise at these concerns. They noted that informal information sharing on rates and rate structures happens regularly, but explained that each staff director has his/her own way of communicating with customers and acknowledged that some may be better at providing customer support than others.
JMD does not systematically measure important aspects of shared service provision and working capital fund management. For example, JMD tracks workload measures such as the number of transactions processed, but does not assess customer satisfaction with shared services. It also does not have measures to assess how effectively it manages the fund, such as whether managers are responsive to concerns about shared service rates or billing issuesareas with which customers have expressed concern. Absent a formal mechanism for customers to provide timely and regular feedback, JMD cannot sufficiently assess whether customer needs are met or have changed. JMD also has not assessed its shared services rates to know whether they provide a good value to customers. If available, specific working capital fund-level performance information would allow JMD to regularly compare actual performance with planned or expected performance. Further, a corresponding management review process could help JMD achieve the efficiencies that working capital funds were designed to produce, potentially freeing up resources that could be realigned for other departmental initiatives. Lastly, performance measures aligned with strategic goals can be used to evaluate whether and how working capital fund activities contribute to departmentwide goals and crosscutting initiatives.
Justice has processes to ensure that excess unobligated balances are used in accordance with legal authorities. It also has an established process to make well-informed decisions on how to spend available funds. However, JMD budget officials told us that these balances were unavailable for departmentwide priorities in recent years because they have been used to meet rescissions.

What GAO Recommends

GAO is making three recommendations to improve the management of the working capital fund, including providing opportunities for two-way substantive communications with customers and developing performance measures for the fund. Justice generally agreed with our findings and recommendations and noted that it will continue to explore ways to address the issues we identified.