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Thursday, June 30, 2011

DoD business systems oversight not good enough, says GAO

Business systems oversight at the Defense Department continues to fall short, says the Government Accountability Office in a June 29 report.

According to data from the Deputy Chief Management Officer, the Defense Department has budgeted $23.58 billion on business systems in the current fiscal year, which ends Oct. 1. The GAO report cites a different figure, that of $17.4 billion, but also notes that DoD business system reporting mechanisms are inconsistent from one to the other.

-David Perera, FierceGovernmentIT.com

Read more: DoD business systems oversight not good enough, says GAO - FierceGovernmentIT http://www.fiercegovernmentit.com/story/dod-business-systems-oversight-not-good-enough-says-gao/2011-06-30?utm_medium=nl&utm_source=internal#ixzz1Qn3J3KvL 

Running a federal financial system often a juggling act

An industry task force advising the White House on financial system modernization programs at federal agencies recommended a sustainment strategy that combines ongoing management with a clear view of the long-term business architecture, according to the group's report.

-Alice Lipowicz, WashingtonTechnology.com

Wednesday, June 29, 2011

ACT-IAC Recommends New Approach to Sustaining Federal Financial Management Systems

FAIRFAX, Va.--(BUSINESS WIRE)--The American Council for Technology’s Industry Advisory Council (IAC) today released a report it has provided to the Office of Management and Budget with recommendations on how to improve the sustainability of Federal financial management systems. The findings and recommendations were shared with OMB and the Federal Chief Financial Officer’s Council prior to the report’s release.

The Administration has embarked upon a major initiative to improve the acquisition and management of the Federal government’s information technology assets (see the Federal CIO’s 25 Point Implementation Plan to Reform Federal Information Technology Management, December 9, 2010). A key part of this strategy is to replace large-scale systems acquisitions with a more segmented approach that focuses on business needs. The OMB Office of Federal Financial Management asked ACT-IAC to provide industry recommendations on how to apply this new strategy to Federal financial management systems. IAC was asked to address four questions:

1.Given that agencies usually maintain a hybrid environment including modernized system components integrated with legacy systems, how can agencies most effectively maintain functionality and improve performance over time? Is change management of this magnitude within the capability of most Federal agencies?

2.When is a system truly on its “last legs”? What criteria should be used to make decisions between incremental investments in an existing system and larger investments in a modernization initiative?

3.Is there a way to incentivize software providers to introduce upgrades in a manner that best serves the taxpayer?

4.What new paradigms exist or are just now emerging that might help apply game changing approaches to the first three questions?

In response to this request, IAC assembled a working group of experienced subject matter experts from 22 companies in the financial and information technology industries. The working group was chaired by Anne Reed (ASI Government) and Andrew McLauchlin (CGI). The working group met over the course of the spring to gather information and form conclusions and recommendations. In accordance with ACT-IAC principles, it operated in a collaborative and vendor-neutral manner that focused on improving government. The final report was a consensus document with recommendations that were unanimously supported by all members of the working group. The 73 page report was officially submitted to OMB on June 24, 2011.


Portfolio management key to federal financial systems, says ACT-IAC paper

Federal agencies should take a portfolio management approach to financial management system modernization in which components that make up the totality of financial systems operate together even while existing in different stages of their lifecycle.

The paper, publically released June 29, was prepared at the request of the Office of Management and Budget by a financial management working group of the Fairfax, Va.-based industry association.

Report authors say federal officials should replace a world view that views financial management as a "system" for one that views automated components and manual processes together as providing a "capability."

Capability can be provided through improvements to legacy systems, new systems, upgrades or other initiatives.

Utilization of a data fusion engine that synthesizes data from a variety of systems would permit an agency operating in such a hybrid environment to nonetheless have an unified view of its financial data, the report adds.

Effective portfolio management does require an organization to have a business enterprise architecture, knowledge of system component costs, in general, a strong governance process, the report says. It suggests using a balanced scorecard to inform decisions of which components should get modernization priority.

-David Perera, FierceGovernmentIT.com

Today's GAO Publications

The Government Accountability Office (GAO) today released the following reports, correspondence and testimony:

Recovery Act: Funding Used for Transportation Infrastructure Projects, but Some Requirements Proved Challenging.
GAO-11-600, June 29.
Highlights - http://www.gao.gov/highlights/d11600high.pdf
Podcast available - http://www.gao.gov/podcast/watchdog_episode_63.html

Recovery Act: Funds Supported Many Water Projects, and Federal and State Monitoring Shows Few Compliance Problems.
GAO-11-608, June 29.
Highlights - http://www.gao.gov/highlights/d11608high.pdf
Podcast available - http://www.gao.gov/podcast/watchdog_episode_63.html

Department of Defense: Further Actions Needed to Institutionalize Key Business System Modernization Management Controls.
GAO-11-684, June 29.
Highlights - http://www.gao.gov/highlights/d11684high.pdf

"Maximizing DOD's Potential to Achieve Greater Efficiencies and Improve Business Operations," by Gene L. Dodaro, comptroller general of the United States, before the DOD Performance Symposium, in Lansdowne, Virginia.
GAO-11-799CG, June 29, 2011

OMB: Financial systems modernizations are back in business

A yearlong overhaul of dozens of federal financial system modernization projects is largely complete and the next phase is managing “steady state” operation and ongoing implementations, an administration official said June 29.

- Alice Lipowicz, FCW.com

Monday, June 27, 2011

IRS Financial Management Systems Have Problems

The Internal Revenue Service’s financial management systems are unlikely to comply with federal laws at least until 2014, according to a new report.

The report, by the Treasury Inspector General for Tax Administration, noted that the Federal Financial Management Improvement Act of 1996, or FFMIA, requires that federal financial management systems provide accurate, reliable, and timely financial management information to government managers.

In November 2010, the Government Accountability Office reported that the IRS's financial management systems do not comply with FFMIA requirements. Specifically, the IRS does not post tax-related transactions in conformance with federal government requirements, and its records lack adequate traceability for taxes receivable.

The IRS also has material weaknesses in its internal controls over both information security and unpaid assessments. The information security material weakness compromises the accuracy and availability of the IRS's financial information and places sensitive information regarding taxpayers and IRS operations at risk, TIGTA noted. The unpaid assessments material weakness affects the IRS's ability to effectively manage unpaid taxes, penalties and interest.

Another recent GAO report that was released earlier this month also found material weaknesses and deficiencies in internal controls at the IRS. The report noted, however, that the IRS has made progress in improving its internal control and financial management since the first financial statement audit in 1992.


Tuesday, June 21, 2011

Today's GAO Publication

The Government Accountability Office (GAO) today released the following  publications:

Management Report: Improvements Are Needed to Enhance the Internal Revenue Service's Internal Controls and Operating Effectiveness.
GAO-11-494R, June 21.


"Meeting the Fiscal and Performance Challenges Facing Government," by Gene L. Dodaro, comptroller general of the United States, before the National State Auditors Association annual conference, in Williamsburg, Virginia.
GAO-11-754CG, June 15, 2011.


Thursday, June 16, 2011

Federal CIO Vivek Kundra Resigns from OMB for Harvard Post

From the OMB Blog:

Posted by Jack Lew on June 16, 2011 at 09:13 AM EDT

Today, Vivek Kundra, our nation’s first federal Chief Information Officer (CIO) announced that later this summer he will be leaving the post for a fellowship at Harvard University.

When President Obama appointed Vivek Kundra as the first U.S. CIO, he said, "Vivek Kundra will bring a depth of experience in the technology arena and a commitment to lowering the cost of government operations to this position. As Chief Information Officer, he will play a key role in making sure our government is running in the most secure, open, and efficient way possible."

When he began at the White House, he brought with him the promise of good ideas and a hard-charging style focused on getting things done, necessary qualities to tackle the difficult issues facing Federal IT – an aging infrastructure with rising operating costs, too many major projects failing to deliver, and increasing vulnerability to outside threats. Two and a half years after joining the Administration, Vivek has delivered on that promise. He has cracked down on wasteful IT spending, saved $3 billion in taxpayer dollars; moved the government to the cloud; strengthened the cybersecurity posture of the nation while making it more open, transparent, and participatory. His work has been replicated across the world from 16 countries that have deployed the data.gov model to tap into the ingenuity of their people to multiple countries that have deployed the IT dashboard to save money.

I want to congratulate him on his move to Harvard in mid-August to serve as a joint fellow at the Kennedy School and the Berkman Center for Internet and Society. We are planning for a smooth transition, continuing these remarkable gains in changing the way the Federal government manages IT and Vivek’s impact on cutting waste and making government work better for the American people will continue to be felt well beyond his departure from Federal service.


OMB controller cites government's 'low learning curve' on analytics

The government is "low on the learning curve" and remains in the "embryonic stage" in the exploitation of digital data analytics to improve efficiency, Danny Werfel, controller in the Office of Management and Budget, told a corporate conference on Wednesday.

The most promising federal work in using technology to reduce fraud and improper payments is being done by the Recovery Accountability and Transparency Board, he said, which is deploying open-source technology, data mining and source triangulation to "set the government on new path."

Werfel spoke at the leadership summit held at the Newseum by business intelligence software firm SAS, which brought together federal financial managers and vendors to explore how private sector analytics tools can enhance government decision-making.

He recounted several "transformational moments" in his long career at OMB that opened his eyes to the notion that financial management systems -- under the rubric of transparency and accountability -- have now become central to the policy process and to public trust in government.

Noting Vice President Biden's announcement on Monday that the Recovery Board's leader and methods for cutting government waste are being applied governmentwide, Werfel said agencies are getting better at creating infrastructure to track spending. "It's a real labor and a push, which shows how far we still need to go" in responding to the "growing call for more transparency and accountability" in federal spending, he said.

The Recovery Board's fraud detection center, Werfel said, shows that the government can be smarter about, for example, avoiding making payments to contractors who are suspended or debarred. He pointed to triangulating tools of data mining that raise such potential red flags as multiple corporations at the same headquarters or contractors with felony records. "Sometimes it's the naming convention that's off," he explained, noting that data mining can uncover that fact that "John Smith" and "John L. Smith" are the same person. Agencies can welcome this because it identifies such issues upfront without spending a dime, he said.

Some agencies, Werfel added, are skeptical that OMB and the Recovery Board have many tools to add to their own kits. But he proved his point when he supervised a pilot project at the Health and Human Services Department, which houses the government's "big fish" that specialize in medical claims fraud. "HHS is good at finding fraud in medical claims" by looking at geographic patterns, he said, "but they're not so good at identify theft, as when doctors steal licenses from doctors in other states and set up false billing practices."

The Recovery Board's data tools "sprung out an entire fraud ring right under HHS' nose," Werfel said. "I'm not saying the Recovery Board is always better, just that many agencies are not effectively deploying the technology. My mission is to gain momentum and make this stuff go viral as we roll in more agencies."

-Charles S. Clark, GovExec.com

Obama announces new steps to tackle wasteful spending

President Obama issued an Executive Order Monday to reduce government waste and abuse.

The order:

• Calls for creation of an 11-member Government Accountability and Transparency Board made up of agency inspectors general, chief financial officers and other officials. The board will work with the Recovery Accountability and Transparency (RAT) Board — created two years ago to monitor the use of American Recovery and Reinvestment Act funds — to apply the RAT board's techniques to other government spending.

• Assigns federal Chief Performance Officer Jeffrey Zients to look for agency management practices that should be adopted across the government.

• Names each agency's chief operating officer to lead efforts to curb ineffective or wasteful programs.

Within six months, the new government accountability board must report on how the government can broaden the use of the RAT board's use of fraud detection technologies.

Those technologies have worked to deter abuse, Vice President Biden told reporters Monday. Out of some $480 billion in Recovery Act spending on contracts, grants and other programs, Biden said, officials have so far found less than $3 million affected by fraud.

The expanded effort is needed to regain taxpayers' confidence in how the government spends their money, Biden said.

In a brief interview after Biden's event, Danny Werfel, who oversees federal financial management at the Office of Management and Budget, said the new campaign will also wrap in efforts to cut down on federal payment mistakes. The administration is already testing a website to prevent money from going to people who have died, federal prisoners and problem contractors. It is asking Congress for $10 million to expand the program next year.

-Sean Reilly, FederalTimes.com


Thursday, June 09, 2011

Four agencies must move to new FM systems

Four agencies must move to a new financial management shared service provider or to a new software system altogether.

The Interior Department's National Business Center will stop supporting CGI's Momentum financial management software. The Nuclear Regulatory Commission (NRC), the Federal Labor Relations Board (FLRB) and the National Transportation Safety Board (NTSB) must make a decision in the near future.

The Equal Employment Opportunity Commission already decided to move to Oracle Federal Financials hosted by a third party vendor.

OMB named NBC as one of four federal shared service providers for financial management in 2005. The other three providers are the Treasury Department Bureau of the Public Debt's Administrative Resource Center, the General Services Administration and the Transportation Department.

Jackson said 15 agency customers are using the other financial management system, Oracle Federal Financials. NBC has hosted Momentum since 2008.

Along with EEOC, NTSB is evaluating a move to Oracle as well, Jackson said.

FLRB and NRC are undecided on how they will proceed.

The three customers that still need to make a decision have several options, including moving to another shared service provider who hosts Momentum, whether government or third party or staying with NBC and transition to Oracle.

Jackson said all the employees supporting Momentum will be absorbed into NBC to work on the Oracle system or on other service offerings outside of financial management.

-Jason Miller, FederalNewsRadio.com

Thursday, June 02, 2011

Air Force in danger of missing 2017 deadline for clean audit

The Air Force's chances of being able to produce a clean audit opinion by 2017--the current congressional mandate for the entire Defense Department--could be running into trouble thanks to implementation of a modernized financial system going wrong.

The Air Force officially began (kicked off Milestone A) in April 2005 implementation of a financial management system known as the Defense Enterprise Accounting and Management Systems, hiring Accenture (NYSE: ACN) in 2006 on a 5-year, $79 million contract to implement the first of three planned DEAMS increments.

In May 2010, the report says, DEAMS crossed a threshold since it was unable to achieve a full deployment decision within 5 years after funds were first obligated, a statutory obligation.

As a result, the Air Force has folded elements from the planned second increment into the first increment and canceled the third increment, the report says.

"All offices recognize DEAMS must receive the authority to field its current capability beyond Scott AFB or risk non-compliance with Congressional mandate for CFO Act by 2017," the report adds.

Since undergoing a "critical program change" as a result of its failure to attain full deployment, DEAMS has been designated as a trial program for realignment under the Business Capability Lifecycle, the report states. BCL is a methodology developed by the Business Transformation Agency that emphasizes prototyping and is favored by Ashton Carter, the undersecretary of defense for acquisition, technology and logistics.

-David Perera, FierceGovernmentIT.com