FedCFO Search Engine

@FedCFO Twitter Feed

Monday, October 11, 2010

Financial management systems in need of upgrade

FederalNewsRadio.com In Depth with Francis Rose interviews:
Bob Tobias, director of public sector executive education, American University

Managers are being asked to "do more with less." Making smart choices requires a strong financial management system, but many agencies just don't have one in place.

"Many departments find it incredibly difficult because it's very expensive. By the time an agency gets all of its individual ... agencies in identifying what it needs and developing the IT project, the IT has made advances and then it's back to the drawing board," said Bob Tobias, director of public sector executive education at American University, in an interview with In Depth with Francis Rose.

When it comes to financial management systems, one of the biggest debated issues is whether or not to "start from scratch with a new fiscal year." One option for agencies is a financial management software package, but Tobias rejects using a software package, saying it does not solve the problem of transferring the agency's current data into the package.

The Office of Management and Budget requires five-year rolling budgets. Maintaining two separate systems and reconciling those systems every year "creates cost-efficiency and effectiveness problems," Tobias said.

An overhaul of financial systems is a tough sell to lawmakers, who take a "if it's not broken, don't fix it" stance, Tobias said. He added that Congress and the Obama administration are more concerned with creating public policy than maintaining and implementing those policies already created.

In order for the financial systems to be updated, a "confluence of events" have to happen, including credibility with Congress, the GAO and inspectors general about the need, cost and staffing to design and implement a program.
This all requires "a great deal of significant leadership time, energy and effort by political appointees who turn over pretty quickly," Tobias said.

Compounding this problem is the current budgetary standstill, with the federal government operating on a continuing resolution.


READ MORE or LISTEN HERE...

Friday, October 08, 2010

Today's GAO Publication

DOD Business Transformation: Improved Management Oversight of Business System Modernization Efforts Needed. GAO-11-53, October 7.

http://www.gao.gov/products/GAO-11-53
Highlights - http://www.gao.gov/highlights/d1153high.pdf

Wednesday, October 06, 2010

Auditor questions DoT financial system database

The Transportation Department's shared service center for federal financial management systems could be operating a database for which new security upgrades aren't provided, according to the Transportation inspector general.


In a report dated Oct. 5, the OIG says contractor auditor Clifton Gunderson, of Calverton, Md., found that the shared service center has been operating a Delphi financial system on a database whose vendor stopped providing security updates in February 2009.

Transportation operates the center as one of four financial systems shared service providers that support other federal agencies under a George W. Bush-era Office of Management and Budget initiative known as the lines of business. In addition to providing financial system support services to DoT, the center also supports a clutch of small agencies including the Government Accountability Office. Current OMB policy no longer requires that agencies at least consider utilizing a shared service provider when upgrading their financial systems.

In its response to the audit, the Transportation office of chief financial officer--which manages the center--said the Delphi operating system never went out of support. "The software remains supported by Oracle (NASDAQ: ORCL) and will continue to be until we move the system to an updated version of the software," wrote David Rivait, the DoT deputy CFO.

The audit otherwise found that the center's controls are suitably designed to meet their objectives and that tested controls "operated with sufficient effectiveness to provide reasonable, but not absolute, assurance."

-David Perera, FierceGovernmentIT.com
READ MORE...

Friday, October 01, 2010

DHS management improvements start with acquisition

The Homeland Security Department is tackling one of its biggest management problems first as part of its overall approach to complete its transformation and get off the government's high-risk list.

Janice Holl Lute, DHS deputy secretary, told Senate Homeland Security and Governmental Affairs lawmakers Thursday that it was improving all stages of its acquisition process as part of its overall management integration effort.

One of the end results, Lute said, is to get off the Government Accountability Office's high-risk list, which is due out in January. DHS management has been on the list since Congress created the agency in 2003.

She added that DHS has reevaluated every performance measure - 180 in all. Lute said the agency has recast them in plain language so they provide indicators of the value the program brings to the mission.

Lute said DHS is focusing on seven initiatives that will contribute to the integration of the department's management. These include enterprise governance, balanced workforce strategy, headquarters consolidation and data center migration.

But it's coming up with a common language and business discipline across their acquisition, financial management and human capital management processes that will make the biggest difference.

She added that DHS is taking additional steps from integrating science and technology to a greater extent to instituting acquisition career development programs to strengthening their procurement staffing.


The department also is conducting regular reviews of project portfolios. Besides the acquisition processes and workforce, Lute said DHS is moving ahead with its financial systems consolidation project, known as TASC.


Industry sources expected DHS to make an award in August for the $400 million program. But the Office of Management and Budget slowed down all financial systems projects for review.

Lute said DHS is following OMB's requirements to focus on specific needs of the components based on risk.


She said once awarded TASC will focus on 18-24 month deployment schedule and a plan to minimize cost and risk.
 
-Jason Miller, FederalNewsRadio.com
READ MORE or LISTEN HERE...

GAO: Pentagon is years from achieving clean financial books

The Defense Department is making progress toward the long-sought goal of putting its financial books in order, but it will take an extended commitment to get there, a top Government Accountability Office official told senators at a Wednesday hearing.

The Pentagon's business operations have long been on GAO's high-risk list. It is under orders from Congress to have its financial statements in auditable shape by 2017.

In the past, the Pentagon's efforts have been hindered by faulty requirements management, systems testing, and oversight, said Asif Khan, GAO's director of financial management and assurance.
Subcommittee Chairman Tom Carper, D-Del., said new military accounting systems are years behind schedule and at least $6.9 billion over their original budget.

Republican lawmakers were critical of the Pentagon's performance.

-Sean Reilly, FederalTimes.com
READ MORE...

DoD will spend at least $6.9 billion more on ERPs

The future financial systems health of the Defense Department depends on enterprise resource planning projects that are mostly late and over budget, according to the Government Accountability Office.

In testimony presented Sept. 29 before a Senate Homeland Security and Government Affairs subcommittee, the GAO said the Defense Department has identified 10 ERPs essential to transforming its business operations. Of those ten, so far one--the Defense Logistics Agency's Business System Modernization--has been implemented despite $5.8 billion already spent, according to the GAO.

That spending figure will likely increase by at least another $6.9 billion, according to figures in the GAO's prepared testimony.

During the hearing, Defense officials emphasized the importance of ERPs in making the notoriously messy DoD books auditable at fiscal year's end. The 10 ERPs being implemented should replace more than 500 legacy systems.

As for the department's stated goal of achieving a clean audit by 2017--a goal that previously was by 2007, but which was changed after the Pentagon realized it would be impossible--Robert Hale, the DoD comptroller and chief financial officer, said it's doable. That is, doable for budget information and information pertaining to mission critical assets.

"If we try for everything, I'm afraid we'll get nothing once again. I believe firmly we've got to pick some priorities and go after it. The only way, in my mind, to set those priorities is to focus on what we use to manage in the Department of Defense," Hale said.

Under current audit guidelines, a clear financial picture in those areas would be insufficient to get a clean audit, Hale acknowledged. The rules might need to be changed, he added, since the hurdle to getting a clean audit would be historical asset cost data.

-David Perera, FierceGovernmentIT.com
READ MORE...
 
For more:
- go to the hearing webpage, complete with prepared statements, or go directly to the webcast
- download the GAO's prepared testimony (.pdf)
- read the fiscal 2010 Defense authorization bill

@FedCFO