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Thursday, July 29, 2010

OMB MEMORANDUM M-10-31: Immediate Review of Information Technology Projects

As part of the FY 2012 Budget formulation process, CIO Council agencies will be required to develop and put in place improvement plans for their highest-risk IT projects. Pursuant to that objective, agencies shall take the following steps:

1. Identify agency high-risk IT projects,
2. Develop improvement plans for these projects, and
3. Present improvement plans in TechStat sessions.


Monday, July 26, 2010

Advisory board to help OMB assess financial management systems

The Office of Management and Budget has named a new advisory board to help it assess the state of federal financial management systems. OMB has opted to halt new spending on systems costing $20 million or more pending a review. The board, which will have no chairman, will include:

-- W. Todd Grams, acting chief financial officer at the Department of Veterans Affairs

-- Jon M. Holladay, acting chief financial officer at the Agriculture Department

-- Danny A. Harris, chief information officer at the Education Department

-- Jerry E. Williams, chief information officer at the Department of Housing and Urban Development

-- Colleen Barros, chief financial officer at the Department of Health and Human Services' National Institutes of Health

-- David M. Fisher, director of the Defense Department's Business Transformation Agency


Thursday, July 22, 2010

$110 Billion in Improper Payments 'Unacceptable' Obama Says

Acknowledging that American families are “cutting every thrill and stretching every dollar,” President Obama said they should “expect no less from their government,” and signed the Improper Payments Elimination and Recovery Act into law.

“Which, translated into English, meanings cutting down on waste, fraud and abuse, and ensuring that our government serves as a responsible steward for the tax dollars of the American people,” President Obama said from the signing in the State Dining Room today.

Improper payments are payments sent by the government to the wrong person or for the wrong reasons or in the wrong amounts, Obama explained, such as payments to companies that haven't paid their taxes, people who are dead, or scam artists. All told these improper payments add up to $110 billion -- more than the budgets of the Department of Education and the Small Business Administration combined.

“And that’s just unacceptable,” Obama said today and challenged his administration to reduce improper payments by $50 billion between now and 2012.

The bill signed into law today will “dramatically expand and intensify our efforts to end improper payments,” the president said.

“Going forward, every agency in our government will be required to conduct annual assessments, to determine which of their programs are at risk of making improper payments,” Obama explained, “Agencies will be required to audit more of their programs and recapture more taxpayer dollars. And we now have rigorous enforcement mechanisms to hold agencies accountable for how much money they save.”

The bill also gives the heads of agencies the authority to use the recovered money to improve agencies' financial management, a use currently not allowed. If agencies do not comply with the law, they will now face penalties.

The president said this isn’t just about lines on a spreadsheet or numbers on a budget.

-Sunlen Miller, ABCNews.com

Wednesday, July 21, 2010

House Homeland Security probes DHS ERP procurement

A troubled enterprise resource planning project at the Homeland Security Department is gaining further scrutiny by the House Homeland Security Committee.

Committee Chairman Bennie Thompson (D-Miss.) and Rep. Christopher Carney (D-Pa.), chairman of the management, investigations and oversight subcommittee, sent a letter (.pdf) on July 16 to DHS Under Secretary for Management Rafael Borras, wanting to know if DHS has halted contractor source selection for its Transformation and Systems Consolidation program.

TASC is one of 20 projects selected by OMB for review under the auspices of a June 28 White House memo which calls for agencies not to initiate new development spending on federal financial management systems worth more than $20 million until
OMB has reviewed spending plans. Both the DHS inspector general and the Government Accountability Office have issued recent reports drawing attention to the program's difficulties. DHS issued a request for proposals for the "end-to-end business processes in support of financial, acquisition and asset management" project with the intention of making an award by the second quarter of fiscal 2010, which ended March 31.

Thompson and Carney, in their letter, said they support the "concept" of TASC, but "serious reservations regarding the projected $450 million cost of the TASC contract remains." The project "falls squarely within the purview of [the June 28 OMB] memorandum," they state, adding that they want to know what impact the memo will have on TASC's future, whether the department is now considering alternatives to TASC, and whether or not the planned OMB review of TASC has commenced.

For more:
  • download the Thompson and Carney letter (.pdf)
  • read the July 2009 DHS OIG report 10-95 on TASC (.pdf)
  • read December 2009 GAO report 10-76 on TASC (.pdf)
-David Perera, FierceGovernmentIT.com

Wednesday, July 14, 2010

VA cancels financial IT modernization portions of FLITE project

The Veterans Affairs Department said July 13 that it will not go forward with a planned financial system modernization project on which it has already spent $16 million.

The project, along with an also-canceled related data warehouse effort, was part of a program dubbed Financial and Logistics Integrated Enterprise and would have cost up to around $333 million to complete, according to figures VA Chief Information Officer Roger Baker gave while speaking to reporters.

The VA will continue to develop the strategic asset management IT system portion of FLITE, Baker said; that system is already undergoing pilot testing in the Milwaukee VA Medical Center.

Unlike the strategic management portion of FLITE, the VA has not awarded any implementation contracts for the accounting system or the data warehouse portions. According to an October 2009 Government Accountability Office report, the VA has spent $90.8 million on FLITE so far, of which $73 million was spent on contractors.

The $16 million figure refers to what the VA has spent specifically on planning the accounting system portion of FLITE, Baker said. The VA hired MITRE Corp, Booz Allen Hamilton and Fairfax, Va.-based YRCI in various financial system support roles, according to VA procurement documents (.doc).

The cancellation stems from doubts over program execution, as well as re-prioritization of limited resources, Baker said. "We'd like to make certain we can be successful on a project before we start," he said, adding that "we can't do everything."

In lieu of one large financial management system effort, the VA will roll out series of smaller financial modernization projects, Baker said. The Office of Management and Budget told agencies on June 28 not to initiate new development spending on federal financial management systems worth more than $20 million until OMB has reviewed spending plans.

The July 13 announcement marks the second time the VA has canceled a financial system modernization effort; in July 2004, it terminated a system called CoreFLS after spending more than $249 million on development.

Information technology management has recently come under heightened scrutiny at the VA with the June 2009 establishment of an effort known as the Program Management Accountability System. However, whether PMAS will be sufficient to correct problems at a department with a string of high-profile IT failures in its recent past is unknown. A May 2010 GAO report said that the VA "has not yet demonstrated that it can sustain the wholesale change in management of IT projects that PMAS represents or that this new approach will be sufficiently robust to prevent or correct weaknesses."

For more:
- listen to an audio recording of VA CIO Roger Baker announcing the program's cancellation; also on the call is Federal CIO Vivek Kundra
- read a redacted fiscal 2010 FLITE Exhibit 300 (.pdf)
- download the October 2008 GAO report on FLITE, GAO 10-40 (.pdf)
- download the May 2010 GAO report on VA IT management, GAO 10-579 (.pdf)

-David Paters, FierceGovernmentIT.com

Tuesday, July 13, 2010

Federal financial management system projects that have been frozen

The Office of Management and Budget made good on its promise to halt new spending on some federal agencies' financial management systems, last week releasing a list of 20 projects that cannot move forward until new plans are approved.

The programs span the agencies -- and more are likely to follow. In a statement, OMB said it expects about 30 financial system projects to be reviewed, but some systems are still being reviewed to see if they qualify.

OMB Director Peter Orszag called for the freeze on new task orders and procurements for selected systems' development or modernization, citing the typical sluggishness and high cost of the projects. To move forward, agencies must prepare plans that divide the projects into short-term tasks and include active monitoring of their progress.

Below is a list of the 20 projects, the total value of the contracts awarded thus far and the top identified contractor -- by contract value -- working on each one, according to the government's database.

-- Financial Management Modernization Initiative [FMMI]: $118.7 million - Accenture ($96 million)
Modernizes the Agriculture Department's outdated financial system technology.

-- Commerce Business Systems[CBS]: $48.6 million - MIL Corp. ($15.6 million)
An integrated financial management system that has been implemented in 12 of the 14 Commerce Department bureaus.
[DOC modernization remains in the planning stages]

-- Financial Management Support System: $68.6 million -- no contractor identified
The financial management system for the Education Department.

-- CF iManage: $174.4 million -- IBM ($132.2 million)
Used by the Energy Department to improve financial and business efficiencies and integrate budget with performance.

-- Financial Replacement System: $109.8 million - CGI Federal ($83.1 million)
Modernizes the Environmental Protection Agency's financial systems to integrate systems.
[Financial System Replacement Project FSMP]

-- NIH Business System: $128.9 million - IAE Solutions ($20 million)
Standardizes financial data for the Department of Health and Human Services' National Institutes of Health.

-- Healthcare Integrated General Ledger Accounting System: not available - EDS (now HP Enterprise Services) ($4.7 million)
Allows the Department of Health and Human Services' Center for Medicare and Medicaid Services to account for payments.
[IBM is the incumbent contractor]

-- Transformation and System Consolidation: Information not available.
[TASC - Proposals submitted, award pending]

-- Integrated Financial Management Improvement Project: Information not available.

-- Financial and Business Management System: $165.3 million - IBM ($116 million)
Integrates financial management, acquisition, property management, travel and more for the Interior Department.

-- Unified Financial Management System: $174.3 million - IBM ($150 million)
Brings together existing and future financial management and procurement operations across the Justice Department.

-- New Core Financial Management System: $63 million - GCE ($50.6 million)
Reduces duplicate processes and provides real-time transactions for the Labor Department.

-- Joint Financial Management System: $267.8 million - Haynes Inc. ($199.5 million)
A financial system collaboration between the State Department and the U.S. Agency for International Development.
[CGI recently awarded 10 yr, $400M consolidation and O&M contract]

-- Delphi - $153.3 million - no contractor identified
The Transportation Department's financial management and accounting system.
[Tantus-Onpoint, SRA]

-- Integrated Financial System/CORE Financial System: $24.4 million - CSC ($24.4 million)
Used by the Treasury Department's Internal Revenue Service for budget, payroll and all financial reporting, among other tasks.

-- Oracle e-Business Suite: $102.4 million - immixTechnology ($100.5 million)
Handles accounting, budgeting and reporting for the Treasury Department's Bureau of the Public Debt.

-- Financial and Logistics Integrated Technology Enterprise: $98.7 million -- no contractor identified
An initiative to replace existing financial and asset management systems with integrated systems at the Department of Veterans Affairs.
[FLITE - rumored to be cancelled]

-- Financial Accounting System: not available - Booz Allen Hamilton ($122.2 million)
Used by the National Science Foundation to monitor and execute about 20,000 active awards to more than 1,500 awardees.

-- Consolidated Business Information System: $97.4 million - Accenture ($79.9 million)
A new financial management system for the Office of Personnel Management.

-- Oracle Administrative Accounting: $22.5 million - SRA International ($22.1 million)
Serves as the system of record for the funding and expenditure of the Small Business Administration's dollars.

-Marjorie Censer, washingtonpost.com

Tuesday, July 06, 2010

Q&A: Mark Forman and Jeff Steinhoff on the new direction of federal financial IT

When the White House released a June 28 memo (.pdf) telling agencies not to initiate new development spending on federal financial management systems worth more than $20 million until the Office of Management and Budget has reviewed spending plans, it was just the latest sign that changes to the way the government manages financial IT systems are underway.

FierceGovernmentIT caught up with Mark Forman, former head of the Office of Management and Budget office of e-government and information technology--now a partner at KPMG--and Jeff Steinhoff, former Government Accountability Office assistant comptroller general for accounting and information management--also at KPMG, as executive director of the firm's government institute--for their reactions to the memo.

Read more: Q&A: Mark Forman and Jeff Steinhoff on the new direction of federal financial IT - FierceGovernmentIT