Finance Lessons from the U.S. Coast Guard

As the person charged with overseeing the transaction processing for the Department of Homeland Security, U.S. Coast Guard Capt. Larry White says his role is really about moving resources between activities and missions. By having moved the focus from dollars to the quantity of mission-related activities, White's team has helped the Coast Guard embrace the value of activity-based costing.

Steve Player: U.S. Coast Guard Capt. Larry White runs the Coast Guard Finance Center, which does a large amount of the financial transaction processing for the Department of Homeland Security. Larry, can you provide some insight into exactly what this means?

Larry White: We process all of the accounting transactions for the Coast Guard, the Transportation Security Administration (TSA), and the Domestic Nuclear Detection Office (DNDO) within the Department of Homeland Security (DHS). We also process all of the purchase cards for the entire department.

SP: So it's essentially a governmental shared services operation?

White: It is. We have the two primary full-service customers, TSA and DNDO, and then, of course, the Office of Financial Management, which is our primary customer for the purchase cards, although all of the agencies inside DHS are served.

SP: How difficult was it getting to a shared services center within a governmental setting?

White: Well, it's increasingly more challenging. The Office of Management and Budget has set up some guidelines and checklists in order to become a shared services center within the government. They're pursuing something called the Financial Management Line of Business Initiative. They grandfathered in four processing centers, and then anyone else in the federal government that wants to become an official shared services center must meet certain requirements; this also includes private sector companies that would like to enter the business.

SP: They allow outsourced competition as well?

White: Yes, they do. They haven't had any takers at this point that I'm aware of, but this option exists and, in fact, is encouraged.

SP: Was the Coast Guard Finance Center one of the grandfathered organizations, or did it have to meet the new requirements?

White: We haven't completed the checklist and gone through the process yet because we've primarily operated within the Department of Homeland Security, and when you're operating within a single department, there's not a requirement to complete the checklist.

SP: Have you contemplated going outside the department? Or are you all primarily focused within?

White: Right now, our focus is within because Homeland Security has a fair amount of growth and opportunity available as a relatively new federal agency, but we are keeping a close eye on the line of business checklist. In fact, I keep it on my desk, so as we make investment decisions and changes in our operations, we move closer to being in alignment with the Office of Management and Budget's requirements.