Office of the Chief Financial Officer United States Department of Agriculture 3 rd Annual APHIS Agreements Meeting Lean Six Sigma Grants Process (LSGP) Presented by Matthew Faulkner

3 rd Annual APHIS Agreements Meeting 11 Agenda Grants Management Line of Business Lean Six Sigma Grants Process USDA/Consortia Fit Gap Assessments Next Steps Related Initiatives

3 rd Annual APHIS Agreements Meeting 22 Grants Management Line of Business Overview In 2003, under the PMA, E-Gov initiative and PL (Grants Streamlining), OMB established a Grants Management Line of Business (GMLOB) as a government-wide solution that supports end-to-end grants management. The goals of GMLOB are: Improve customer access Improve efficiency of the submission process Improve decision making Integrate with Financial Management System Improve efficiency of reporting procedures in order to increase usable information content Optimize post-award and closeout actions

3 rd Annual APHIS Agreements Meeting 33 Lean Six Sigma Grants Process Lean Six Sigma Lean and Six Sigma are process improvement methodologies designed to increase the effectiveness and efficiency of an organization. Lean is about speed and efficiency Six Sigma is about precision, accuracy, and customer satisfaction Lean Six Sigma provides maximum value to consumers and clients with high quality products and services at the lowest possible cost. DEFINEMEASUREANALYZEIMPROVECONTROL

3 rd Annual APHIS Agreements Meeting 44 Lean Six Sigma Grants Process USDA’s Grants Environment 200 grant programs in 16 agencies Over $60 billion in annual disbursements to over 134,000 grantees Diverse mandatory and discretionary grants Seven electronic systems and untold number of manual processes Independent agency operations Lack of a Department-wide view of the grants portfolio 68% of USDA grants processes are manual Cycle times per phase range from days 39% of initial applications received are unacceptable

3 rd Annual APHIS Agreements Meeting 5 All common processes will be supported by a documented, integrated, streamlined, sustainable and transparent approach. All exceptions will be justified and approved. A means to measure and improve customer satisfaction will be designed. Cost for managing grants will be reduced. Number of payment methods will be reduced to two. System will collect LSS metrics. Service oriented architecture will be used. A single interface with the financial system will be created. Duplication of efforts will be eliminated. Administrative burden for programs & customers will be reduced. Lean Six Sigma Grants Process Goals

3 rd Annual APHIS Agreements Meeting 6 Lean Six Sigma Grants Process Problems vs. Benefits Problem: Retiring workforce and high turnover (est. turnover is 15% in 2010).  Benefit: Business processes are formally documented and streamlined to eliminate non-value added steps. Provides a standard process across USDA organizations. Problem: Inflation and pay increases must be absorbed into flat budgets.  Benefit: Lean Six Sigma targets reducing waste, time, and steps in business process while increasing customer satisfaction. Problem: Financial and IT regulations increase cost.  Benefit: Lean Six Sigma creates a uniform process with minor exceptions.

3 rd Annual APHIS Agreements Meeting 7 Lean Six Sigma Grants Process APHIS Scope Plant and Animal Disease, Pest Control, and Animal Care  CFDA #  FY07 $175,049,437 Wildlife Services  CFDA #  FY07 $8,584,881

3 rd Annual APHIS Agreements Meeting 88 Lean Six Sigma Grants Process Modernization Challenge 200 Grants Programs To-Be Process Model 1 common, standardized process

3 rd Annual APHIS Agreements Meeting 99 Lean Six Sigma Grants Process To-Be Process Model

3 rd Annual APHIS Agreements Meeting 10 USDA/Consortia Fit Gap Assessments During the third quarter of FY2008, USDA validated the fit gaps conducted with the GMLOB Consortia leads to gain a better understanding of the Consortia offerings. Following this analysis, USDA conducted a more detailed fit gap against the HHS solution.

3 rd Annual APHIS Agreements Meeting 11 USDA/HHS Detailed Fit Gap Results 570 Discrete Functional Requirements  USDA 59% fit  HHS 66% fit  42% overlap between USDA and HHS functionality  17% gap Crosscutting Requirements not addressed by HHS  LSS Metrics  SOA  Common Desktop  Financial System Interface Additional considerations  Grant processing volume Reported to OMB on December 31, 2008

3 rd Annual APHIS Agreements Meeting 12 USDA Next Steps Entered a reevaluation mode Conducting a detailed fit gap of the SAP software solution

3 rd Annual APHIS Agreements Meeting 13 Related Initiatives Grants.gov Financial Management Modernization Initiative (FMMI) Federal Funding Accountability and Transparency Act (FFATA) American Recovery and Reinvestment Act (ARRA)

Office of the Chief Financial Officer United States Department of Agriculture 3 rd Annual APHIS Agreements Meeting Questions?