The Federal Financial Management Improvement Act of 1996 (FFMIA) established uniform financial systems, standards, and reporting requirements across the federal government. To guide agencies in modernizing and aligning their financial systems with federal financial management (FFM) standards and regulatory requirements, the Office of Management and Budget (OMB) issued Circular No. A-123 Appendix D.

The Department of the Treasury (Treasury), acting through the Bureau of the Fiscal Service (BFS), serves as the designated standards lead for core financial management and is responsible for developing and maintaining FFM system requirements and other FFM standards that are part of the business capability framework that agency financial management systems must support.

This TFM chapter sets forth FFM standards and capability framework that the Treasury maintains and advances to ensure that agency financial management systems are effective, efficient, reliable and comply with applicable laws and regulations.

The FFM system requirements outlined in this chapter will help agencies:

• benchmark their core financial systems and business processes against the Financial Management Capability Framework (FMCF) that includes:
  • FFM Functions and Activities,
  • FFM Business Use Cases,
  • FFM Business Capabilities,
  • FFM Business Data Elements,
  • Core FS Pre-Built Business Reports, and
  • Core FS Pre-Built Business Information Exchanges (BIEs).
• determine financial management systems compliance with FFMIA requirements, and
• assess readiness for modernization and serve as the starting point for developing agency core financial system requirements for obtaining solutions or services from the FM Marketplace.

The scope of this chapter does not include the following:

• agency-specific requirements beyond what is defined in the FMCF.
• standards that are set by other Lines of Business (e.g., Travel, Human Capital), or
• FFM business processes not defined in the FMCF (e.g., budget formulation, point of sale).

The Federal Financial Management Improvement Act of 1996, Pub. L. 104-208 (31 U.S.C. 3512 note) (FFMIA) requires federal agencies to implement and maintain financial management systems that substantially comply with federal financial management system requirements (FFMSRs), applicable federal accounting standards, and the U.S. Standard General Ledger at the transaction level.

OMB Circular No. A-123, Appendix D, Management of Financial Management Systems - Risk and Compliance, defines the agency requirements for determining compliance with FFMIA. It also describes responsibilities and Treasury, as the lead agency for FFM standards, is responsible for maintaining processes to evaluate and approve, as necessary, any proposed changes to the FFMSRs in the business capability framework.

Treasury is directed to publish Federal Financial Systems Requirements in the Treasury Financial Manual pursuant to the following authorities:

• Federal Financial Management Improvement Act of 1996, Pub. L. 104-208 (31 U.S.C. 3512 note) (FFMIA),
• E-Government Act of 2002, and
• OMB Circular No. A-123, Appendix D.

For terms and definitions related to this chapter, please view the TFX Glossary.

• FMCF 101 Training for Agencies
• Guide to the FM Marketplace
• Federal Financial Management (FFM) Updates

Agencies should use the Federal Financial Management System Requirements and business capability framework in accordance with Appendix D (Compliance with the Federal Financial Management Improvement Act of 1996) to OMB Circular A-123 (Management's Responsibility for Enterprise Risk Management and Internal Control) as it pertains to financial management and mixed systems.

Direct questions regarding this chapter to:

Department of the Treasury  
Bureau of the Fiscal Service  
Financial Management Line of Business (FMLoB)
FMLoB@fiscal.treasury.gov