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Wednesday, June 09, 2010

Exclusive: OMB to propose major changes to financial management systems

The Office of Management and Budget is considering major changes to the way agencies develop and implement financial management systems.

In a draft memo obtained by Federal News Radio, OMB director Peter Orszag would halt all new financial management system modernization projects worth at least $10 million, and all existing task orders for ongoing development efforts worth more than $500,000.

The draft memo calls for OMB to approve agency implementation plans.

Additionally, OMB would apportion money quarterly to pay for the next phase of the system development instead of letting an agency have the entire amount at once.

"[T]his memorandum initiates a re-examination of these expensive and lengthy investments in financial management solutions in favor of shorter-term, lower-cost, and easier-to-manage solutions," Orszag writes in the draft memo.

OMB would require agencies to break projects into segments that last no longer than 90 days and the entire project should go on for no more than 24 months. Agencies to focus on their most critical needs first in this segmented approach, the memo states.

Agencies must submit to OMB 60 days after the memo is finalized revised project plans to outline strategies for reducing costs, shortening the timeline and reduce risks.

The memo also would call for OMB and a new Financial Systems Advisory Board, which would be made up of the agency chief financial officers and chief information officers, to review projects and make recommendations to OMB.

OMB also is removing the mandate for agencies to move to shared service providers. The memo encourages the use of these common providers, but only when it makes most sense.

"Further, financial management shared service efforts will now focus on the higher impact area of transaction processing. OMB, Department of the Treasury and the CFO Council will identify and facilitate the acquisition or development of common automated solutions for transaction processing."

An OMB spokeswoman says OMB doesn't comment on draft policy.

-Jason Miller, FederalNewsRadio.com

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