News Release

HHS Takes Important Step in Full Unified Financial Management System Implementation
The CDC and FDA Accounting and Budget Activities Now Streamlined, CMS Implements HIGLAS

HHS announced today a key step in streamlining and integrating its financial management systems with the full implementation of the Unified Financial Management System (UFMS) at the Centers for Disease Control and Prevention (CDC) and the Food and Drug Administration (FDA). The Centers for Medicare & Medicaid Services� (CMS) new system began implementation earlier this month.

�Improved fiscal management and accountability for the largest budget in the federal government is paramount,� said Kerry Weems, HHS Deputy Chief of Staff and UFMS Executive Sponsor. �With our accounting systems responsible for more than a half trillion-dollars across more than 300 programs in 11 agencies, moving forward with the full Unified Financial Management System at the CDC and FDA will greatly improve our capability to manage the public's tax dollars.�

The UFMS is a business and financial management tool that will improve the efficiency and effectiveness of financial, business and operational functions across the department. Capabilities of UFMS include general ledger, budget execution, accounts payable, accounts receivable, purchasing, grants management and payroll activities.

HHS began department-wide use of the UFMS with a general ledger system for payroll transactions at CDC and FDA last October. This was a significant achievement for two reasons: first, it allowed the department to move from a test environment to a production environment and, secondly, it allowed for the successful interfacing of UFMS financial data with existing HHS feeder systems. The concept of using the general ledger function to enhance budget distribution and core accounting capabilities was successfully proven at the National Institutes of Health (NIH) in October 2003. The entire department is scheduled to use the UFMS, fully, by the end of 2007.

On May 4, CMS� Healthcare Integrated General Ledger Accounting System (HIGLAS) began processing approximately 158 million dollars worth of claim payments per day to more than 8,000 providers for most hospital inpatient services in South Carolina and home health services in the 17 states served by Palmetto Government Benefits Administrator.

HIGLAS is a component of the UFMS and is part of CMS� total financial management system to enhance the agency�s financial structure, improve internal controls and ensure reliable data. HIGLAS centralizes once duplicative processes for collecting and reporting financial data to allow for the better detection and resolution of errors in a timelier manner. This integration greatly improves Medicare�s fiscal accountability to beneficiaries and American taxpayers.

�We have taken aggressive steps to ensure that we are paying Medicare claims appropriately,� said CMS Administrator Mark B. McClellan, M.D., Ph.D. �Our new dual entry accounting system, common in the private sector, will improve our ability to track the nearly one billion Medicare claims we pay each year, ultimately improving our fiscal accountability to beneficiaries and American taxpayers.�

CMS will fully integrate Medicare's 52 different accounting systems into HIGLAS during the next four years. The second Medicare contractor to implement the new system will be Empire Blue Cross and Blue Shield on July 11.

The UFMS will reduce costs by replacing five redundant and outdated accounting systems now in use at NIH, CDC, FDA, CMS, and the Program Support Center (PSC), which provide financial accounting and reporting services for the remaining seven HHS agencies.

�The UFMS is changing the way we do business at HHS as it will improve efficiencies in business and technology, thus making them more fiscally sound,� said Kerry Weems. "We closed the books on our first month of operations at CDC and FDA in record time and are well on our way toward full implementation of the largest integrated financial management system in the world.�

In the past, for example, each HHS agency maintained its own database of vendors with which the agency did business, resulting in wide duplication of effort in maintaining common information on these companies and their contract performance. The UFMS will retain this information in one central place, allowing HHS and its agencies to more effectively manage contracts and analyze vendor performance.

The UFMS is built using a federally-certified commercial off-the-shelf software package called Oracle� Federal Financials, a part of Oracle E-Business Suite, which is used by a number of other federal agencies. Using a commercially available off-the-shelf product carries the advantages of building in commonly accepted financial industry standards and reducing the costs and risks of building an entirely new customized system. HHS contracted with BearingPoint, Inc., a business consulting and systems integration company, to assist with the development and implementation of the UFMS.

More information on the UFMS is available on the Web at http://www.hhs.gov/ufms.