Streamlining Financial Management Policy Formation at U.S. FDA
The client’s perspective
The Office of Financial Management (OFM) of the U.S. Food & Drug Administration (FDA) oversees agency-wide budget formulation and execution, accounting, payment processing, financial reporting and financial systems across FDA’s 10 operating centers. It also develops, operates and maintains FDA’s central financial systems. After implementing Oracle’s financial software and undertaking a related large-scale transformation of its organization and processes, OFM needed to better align its financial management policies and procedures.
A new view
Financial policy formation at OFM was a complex and dispersed function with little centralized guidance. This lack of integration and centralized oversight made each update virtually an ad hoc process, leading to a long lag time and inefficiencies with the financial management process. OFM needed to establish a mechanism for reviewing and updating existing policies. Many policies had not been reviewed in 10–15+ years, and when one was reviewed/updated, it often took up to one and a half years for it to be approved and implemented.
To provide oversight, the OFM wanted to establish a policy council to provide the governance mechanism for managing and maintaining its policies. The council would have representatives from all FDA centers and offices, as well as the U.S. Department of Health and Human Services and the U.S. Department of the Treasury. Establishing this governance mechanism would be a complex undertaking within the FDA because of the decentralized nature of the agency. The 10 centers operate semi-autonomously, and in the past had resisted similar agency-wide governance councils.
OFM brought in Eagle Hill to plan and design the policy council, including drafting its charter; defining its organizational structure; identifying and developing business processes to launch and maintain the council; establishing and supporting the council through management and coordination of stakeholder needs across FDA; and creating comprehensive implementation and communications plans to support the council’s launch and long-term maintenance.
OFM also charged Eagle Hill with developing a centralized solution to organize, store and manage the large volumes of administrative and operational documents within OFM. The key benefits of this centralized solution would be to establish strong version control, security processes over document storage, archiving and retrieval.
A breakaway approach
Eagle Hill worked with the deputy CFO of the FDA as well as with the OFM (approximately 200 people) to establish new business processes for making informed decisions about financial policies, keeping the policies up-to-date, making policy changes more quickly and building accountability into policy decision-making throughout the organization.
To start, Eagle Hill worked with the CFO to define a new governance structure for establishing the FDA-wide policy council. We defined a framework for charter; identified which groups within the agency should be represented on the council; and outlined the timing, location, and length of meetings. During the initial council meetings, Eagle Hill served as facilitator and solution architect to help the council finalize its charter and agree on how it would operate moving forward. Eagle Hill played an ongoing role in the support of policy council meetings. We coordinated policy update priorities; assisted in drafting new or updated policies; facilitated the meetings, tracked and monitored action items; created regular status reports; documented meeting minutes; and drove the policy feedback and approval process.
Eagle Hill was also tasked to design and implement new business processes to support FDA-wide financial policy development. First, we conducted best practice research to support the process design. We then conducted an “as-is” assessment and identified gaps between the current and desired end state of the new process workflows. Once the analysis was complete, Eagle Hill defined the future state for new business processes, including workflow charts and written standard operating procedures and process guides that could be used for implementation and training.
As a next step, Eagle Hill assessed the existing financial policies. We reviewed them for completeness, accuracy and adherence to USDA, Department of the Treasury and Department of Health and Human Services requirements. Based on a series of internal interviews and analysis of the existing documentation, Eagle Hill provided OFM with a detailed inventory of 1) all existing financial policies that required revision and 2) new policies that needed to be developed. Eagle Hill worked with OFM and the policy council to prioritize the updates and new policy development and then managed the process for updating and implementing them.
Eagle Hill also managed the design and implementation of a document management solution to ensure that all key financial documents, including policy changes, were housed in a single repository for ease of access and archiving purposes. This meant working with the information management group to identify all the key system requirements, user design, security permission protocols and testing.
In the past at the FDA, it had been very difficult for management to keep policies up to date and to have visibility into the exact status of the policies and the update process. To address this issue, in conjunction with the underlying governance solution, Eagle Hill also designed and implemented a performance measurement dashboard reporting system solution that allowed FDA leadership to track the outcomes of this mission-critical program. It allowed FDA leadership to verify program effectiveness, and determine impending priorities. Eagle Hill worked with OFM leadership to identify short-term and long-term measures/targets. Then we developed metrics and a tracking mechanism to measure, monitor, and track scope, priority, complexity and current status.
Finally, FDA wanted to open up new communications channels with stakeholders who would be impacted by the new policies. Eagle Hill developed a communications plan that identified stakeholders, communication channels and timelines to accompany the rollout of the policies and procedures. We also wrote communication materials to support the implementation of new policies.
As a result of Eagle Hill’s efforts, the FDA CFO quickly understood the status of their current policies and procedures and understood the steps that needed to be taken to update and maintain them. Establishing a policy council has provided the client with the capability to make informed decisions about policies, keep the policies up-to-date, make policy changes more quickly, and build accountability about policy decision-making throughout the organization. In addition, the updated policies achieved compliance with federal and department directives, regulations, and laws and provide employees with clear direction. The policy dashboard report that Eagle Hill designed and implemented identified important metrics for monitoring policy status, trends, schedule status, future meeting plans, and a risk analysis. As a result of our efforts, FDA reduced the policy approval process from one and a half years to three months.