OMB gives agencies more control over financial management systems

Agencies are gaining more control over how to upgrade their financial management systems.

Instead of a strict set of rules around the technology requirements for federal systems, the Office of Management and Budget will rescind Circular A-127 that governs financial systems, and, through this memo, move and simplify those regulations into Appendix D of Circular A-123.

OMB Director Sylvia Burwell wrote in a memo to agency leaders that said, "The goal of this Appendix is to transform our compliance framework so that it will contribute to efforts to reduce the cost, risk, and complexity of financial system modernizations. The objective of this approach will be to provide additional flexibility for federal agencies to initiate smaller-scale financial modernizations as long as relevant financial management outcomes (e.g., clean audits, proper controls, timely reporting) are maintained."

In a nutshell, implementing the Federal Financial Management Improvement Act (FFMIA) has become arduous and ended up forcing agencies into costly financial management upgrades.

So now Appendix D is more streamlined. OMB reduced the number of requirements from more than 500 to about 60 that focus on outcome or output.

OMB began to dismantle FFMIA regulations over the last several years. The administration closed down the Federal Systems Integration Office (FSIO) in March 2011 and moved a lot of the oversight and standards work to the Treasury Department's Office of Financial Innovation and Transformation (OFIT).

-Jason Miller, FederalNewsRadio.com
READ MORE...

OMB urges shared services for financial management

Having witnessed the struggles that come with large-scale, complex financial management systems, the Office of Management and Budget now wants agencies to opt instead for shared service providers. The plan is to make greater use of common systems, transaction processing and their providers' expertise.

"Traditional approaches to financial systems implementations have left agencies exposed to significant risks in cost, quality and performance," Danny Werfel, federal controller, wrote in a memo March 25. "The cost, quality, and performance of federal financial systems can be improved by focusing government resources on fewer, more standardized solutions."

His new memo directed agencies to use a shared service provider for future modernizations of core accounting systems. When agencies share services, they can strategically source software providers and hosting services by buying in bulk, he wrote. Sharing also reduces the risks and delays that can come when agencies implement their own systems.

"OMB's guiding principle will be to support plans that offer the best value for the federal government," Werfel wrote.

Finally, by using shared service providers aligned with common standards and systems, the government can get better quality data about federal finances, including auditable financial statements on a governmentwide level.

-Mathew Weigelt, FCW.com
READ MORE...

OMB to test agency readiness to move to financial shared services

Agencies will have to take a test to measure just how ready they are to move their financial management system to a federal shared-service provider.

The Treasury Department's Office of Financial Innovation and Transformation (OFIT) and OMB will run the tests, which are specifically designed for large agencies, that over the past nine years have been reluctant to use these common services.

"What the test will do is we'll say, ‘What are the business requirements you have established for your financial system?' We will compare and contrast them to the requirements of a standard, common, generic shared-service provider. And the closer your requirements are to that generic shared-service provider, the higher score you will get on the test and the more amenable OMB is going to be to propose funding and approve such a system in the President's budget," said Danny Werfel, OMB's controller, in an exclusive interview with Federal News Radio. "The further you are away, the more bells and whistles, the more integrated requirements you are seeking out that makes you very different from a shared service provider footprint, the lower your score will be on the test and the more difficulty you will have in getting support from OMB for that solution."

He said the message agencies need to understand is OMB's goal is to have them use simple, non-unique and generic systems for their basic general ledger accounting system.

Werfel said OMB is developing a governmentwide policy that should be out in the next few weeks to formalize how this new process will work. OFIT will develop and initiated the test of agency business requirements.

-Jason Miller, FederalNewsRadio.com
READ MORE and LISTEN HERE...

AGA Releases Executive Report: 2013 Federal Financial Systems Summit Summary

Nearly 500 government financial leaders gathered at AGA's Federal Financial Systems Summit (FSS) in Washington, DC to learn about and discuss the near-term and future prospects of federal financial management and systems in a budget constrained environment.  AGA released its Executive Report on the summit sessions on their website recently.

Download the Report Here...

Shared Services Strategy from OMB and Treasury Previewed at AGA’s Third Annual Federal Financial Systems Summit

Over 400 government financial professionals gathered at AGA’s Federal Financial Systems Summit in Washington last week to learn about and to discuss the near-term and future prospects of Federal financial management and systems in a budget constrained environment. The summit provided for an open dialogue between federal agency stakeholders, private-sector sponsors and key policymakers from the Office of Management and Budget (OMB) and the U.S. Department of the Treasury (Treasury) through town hall-style sessions where participants were encouraged to engage each other and openly express their thoughts, ideas and concerns.

Danny Werfel, Controller, OMB and Richard Gregg, Fiscal Assistant Secretary, Treasury, set the tone at the event by declaring a renewed commitment to drive federal agencies seeking to modernize their financial management systems to utilize shared services, where possible. In alignment with OMB’s Office of Electronic Government “Shared First” strategy, OMB and Treasury will be issuing new guidance very soon, and coordinating with agencies to leverage shared services for their core financial systems modernization initiatives.


READ MORE...

CGI Cloud takes Railroad Retirement Board to the cloud for $66M

CGI Federal Inc. has won a $21 million contract to transition and host the U.S. Railroad Retirement Board’s financial management systems in the CGI Momentum Community Cloud.

This award has one implementation year, one base year and nine option years, the company said.

Under the contract, GCI will convert the legacy financial management system to its community cloud, delivering end-to-end support, such as conversion, training, change management, hosting and maintenance.

- Mark Hoover, WashingtonTechnology.com
READ MORE...

Microsoft Dynamics Now Meets Gov’t Security Requirements

Microsoft recently announced the availability of cloud-based Microsoft Dynamics business services designed to meet the security and functionality requirements of U.S. federal government agencies.

The services were designed to enable government organizations to collaborate, manage data and improve processes, while leveraging the potential flexibility and cost savings of a cloud-based delivery model hosted by Microsoft partner Layered Technologies Inc.

Intended to meet the National Institute of Standards and Technology security and control standards required of federal agencies for Federal Information Security Management Act compliance, the Layered Tech environment includes a private cloud with dedicated hardware and physical storage for the tightest security requirements, Microsoft said.

A set of Microsoft Dynamics services will be available on the new infrastructure, designed to allow government agencies to provide functions such as workforce management, task management, field inspection, intelligence gathering, call center interactions, financial management, grants management and emergency response.

READ MORE...

CFOs remain tepid on financial shared services

Federal chief financial officers say finding efficiencies in their agency is among their top priorities. But moving to a financial management shared service provider or even to individual shared applications doesn't rank high on their to-do lists.
 In an exclusive Federal News Radio survey of CFOs and deputy CFOs conducted in August, 55 percent of the respondents rated spending money more wisely as their top priority. But at the same time, 36 percent rated moving to the Internet Payment Portal or other financial management shared services as their fourth highest priority, while only 9 percents ranked it as high as third overall.
Adam Goldberg, executive architect in the Office of Financial Innovation and Transformation (OFIT), said CFOs are showing a greater interest in shared services, but they haven't fully committed to the concept.

Federal News Radio conducted the anonymous survey to find out how CFOs and deputy CFOs are dealing with and preparing for sequestration, budget cuts and other challenges. We sent the survey to 58 federal budget officers and received a 24 percent response rate. Out of those who responded, 46 percent were with a cabinet-level agency and 39 percent were with a large agency. All respondents said they are a career official and not a political appointee. This is the second survey of CFOs in 2012. The first survey also showed CFOs weren't ready to move to shared service providers either.  But now nine months later and with the release of the Office of Management and Budget's shared services strategy, agency budget executives remain uncertain about using these common systems. Goldberg said CFOs are starting to come around to the idea especially as budgets shrink and their workforce retires.

OFIT is leading an effort to develop several shared services, including electronic invoicing, centralized receivables collections and intergovernmental transactions.  Goldberg said there is greater interest to use these one-offs as opposed to moving an entire financial management system to a shared service provider.  OFIT is getting ready to start a two-year pilot with the centralized receivables collections application. The program will help agencies collect outstanding debts, which could be for a travel expense, a fine or a penalty. Treasury hired a contractor to act as a debt collector, who would take over the billing, the notices and the follow ups that need to take place.

Goldberg said agencies could save $300 million-to-$350 million annually when it is fully scaled across the government.

In addition the debt collection initiative, OFIT's e-invoicing program could save the government millions. Goldberg said at full capacity, agencies could save between $400 million-and-$450 million a year.

-Jason Miller, Federal NewsRadio.com
READ MORE...

JFMIP Conference Videos and Presentations Posted Online

The presentations and video of the 2012 JFMIP Federal Financial Management Conference, "Government Financial Management in Lean Times: The New Normal," are available online.

Find the Conference Material Here...

THE CFO ACT OF 1990: Current Systems Considerations, Modernization and Achieving Compliance

The Chief Financial Officers (CFO) Act of 1990 called for major reforms in federal financial management. As we celebrate the first 20 years of this landmark legislation, it is important to reflect on the accomplishments and the remaining challenges. Among the foundational requirements of the CFO Act was a call for the "systematic measurement of performance, the development of cost information and the integration of systems - program, budget and financial.'"! Systems, along with people and processes, are at the heart of highperforming CFO organizations. A lot has been achieved in the past two decades. We have seen federal agencies go from a complete lack of accountability to clear, auditable financial statements, vast improvements in financial reporting, and greater visibility and transparency to American taxpayers. When we look to the future, the evolution of financial management systems that support the systematic measurement of performance, the development of cost information, and the integration of systems as called for in the CFO Act will be a continuing priority. This article addresses the current state of financial management systems and what needs to be done to continue the movement to high performance.


- Robert Maitner, AGA Journal of Government Financial Management, Winter 2010
READ MORE...

New governmentwide financial systems on tap

By the summer, agency chief financial officers will begin figuring out how to move to new governmentwide systems to process intergovernmental transactions and vendor invoices.


Danny Werfel, the Office of Management and Budget's controller, said the Treasury Department is in the middle of testing and analyzing existing systems to see which could be expanded.

Werfel said by May or June Treasury and OMB should come to a final decision about which systems to use and begin to figure out how agencies should migrate to these common systems.


OMB and Treasury has been working on these common systems since last winter.

It's also how the Obama administration has modified the Financial Management Line of Business initiative started under the Bush administration. The FM LOB tried to standardize business processes and terminology, and get agencies to shut down their systems and move to shared service providers. OMB announced in March it was closing the Financial Systems Integration Office (FSIO), which led much of the business process standardization work. Instead of FSIO, OMB set up the Office of Financial Innovation and Transformation (OFIT) within Treasury to lead these intergovernmental transactions and vendor invoicing pilots.

Werfel said the governmentwide systems are among the CFO community's top priorities in 2011.

One of the top goals is to further reduce improper payments. Werfel said agencies made significant progress in 2010, reducing the governmentwide improper payment rate to 5.49 percent, from 5.65 percent in 2009.

Werfel said this means that agencies prevented an additional $3.8 billion in improper payments from being made in 2010.

Along with improper payments, Werfel and other agency CFOs detailed priorities and plans at a recent CFO Council meeting. The 47-page PowerPoint presentation goes through everything from improper payments to technology innovation to open government and transparency to decision support and workforce challenges.


Werfel said federal financial management is getting better each year despite the Defense Department's inability to get audited.

The Government Accountability Office issued its annual report last month finding for a 14th straight year that auditors could not issue an opinion.

Still, Werfel said the total number of clean opinions is up to 20, including NASA, which moved from a disclaimed opinion to a qualified opinion.

OMB also is working closely with DoD on its financial books.


Werfel said the Pentagon is focused on different key areas to help it become auditable. He said DoD is starting with activities that are most closely related to their operational and mission success, which includes things like how money flows through the agency, managing execution and cash flows.

-Jason Miller, FederalNewsRadio.com
READ MORE or LISTEN HERE...

January 11, 2010 - AGA Federal Financial System Summit

On January 11th, AGA will host a FREE one-day event in Washington, D.C. that brings together federal financial managers and the private sector executives to discuss the practical implications of the

OMB issued Memorandum M-10-26 . We will hear from several large and small agencies on their approaches to the new requirements and their lessons learned. We will also hear perspectives on where things are moving with technology modernization from both government and private sector.

Featured speaker: Danny Werfel, Controller, U.S. Office of Management and Budget.

CPEs: 7

http://www.agacgfm.org/conferences/fss.aspx

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

-WashingtonPost.com
READ MORE...

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
READ MORE...

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
READ MORE...

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.
[EDCAPS]

-- 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.
[FBMS]

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

-- 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
READ MORE...

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

Is industry facing a $20B hit?

OMB's freeze on financial management and modernization projects might cost opportunities for contractors

Industry today had a mixed reaction to the Obama administration’s move to halt any project that updates a federal financial management system and to change the features of future projects.

Some companies working on agencies’ financial systems are unsure about how they will get hit by the new directive. At the same time, one small business welcomes the news of smaller projects, instead of the mammoth, built-from-scratch systems. Overall though, everyone’s going to get hit, experts say.

On June 28, Obama administration officials said they were forcing agencies to stop projects to modernize financial management systems, until officials in the Office of Management and Budget review and approve the project. Currently 30 projects are on hold, according OMB. The total cost spent on these projects is anticipated to be $20 billion over the life of these projects, with an additional $3 billion spent annually. Officials also issued a policy to chop large modernization projects into smaller bits, which would keep tighter reins on projects that tend to veer off course.

Several of the large companies that work with the government on financial systems were still trying to find out as much as they can about the new guidance. Several spokesmen said they needed more information about the projects and the project reviews before commenting. Without those details, they couldn’t get a good sense of what’s likely to happen and how the policy would affect their companies, and industry overall.

One expert who works at a major IT company was sure of one thing: This would be a hot topic of conversation in the coming days.

The underlying issue is spending money wisely. Jeffrey Zients, deputy director for management and federal chief performance officer, said the overall effort is getting higher returns for the roughly $80 billion the government spends on information technology.

Zients said he wants to use the private sector’s approach of checking a program frequently to keep things on track.

However, Doug Davidson, publisher of the Federal Financial Management News Web Log, said the small companies will be get hit by OMB’s hold. When the projects stop, the big companies, which are often the prime contractors, have to scale back their work. The companies will reserve their resources for their own employees and let the subcontractors go, he said.

In the end, companies that maintain agencies’ legacy systems will benefit from OMB’s memo, he said. With no new projects, agencies must rely on their current systems. Davidson agreed with OMB’s principle of saving money and reducing the government’s risks. But the consequences of stopping modernization projects can hurt the government more than some projects, especially those that are in the final stages of implementation.




-Mathew Weigelt, FederalComputerWeek.com
READ MORE...

Cutting Waste by Reforming IT

As I’ve written before, one source of ineffective and inefficient government is the technology gap between the public and private sectors.While a productivity boom has transformed private sector performance over the past two decades, the federal government has almost entirely missed this transformation and now lags far behind on efficiency and service quality. We are wasting billions of dollars a year, and more importantly are missing out on the huge productively improvements other sectors have benefited from.

Quite simply, we can’t significantly improve the efficiency and effectiveness of the federal government without fixing IT.

That’s why today, in our ongoing effort to make sure that taxpayers’ dollars are spent on projects that work, we are taking three specific actions to advance IT reform.

First, I am directing all executive departments and agencies to stop issuing new task orders or procurements for all financial system modernization projects – an area of persistent problems – pending review and approval by OMB of new, more streamlined project plans. Financial system modernizations projects in the federal government have become too large and complex. By setting the scope of projects too broadly rather than focusing on essential business needs, federal agencies are incurring substantial cost overruns and lengthy delays in planned deployments. Compounding this problem, projects persistently fall short of planned results once deployed. For instance, the Department of Veterans Affairs (VA) has invested over $300 million in two financial system projects over the past 10 years. The first project ended in failure and no operational capability has been realized with the second.

Across the government, there are approximately 30 financial systems projects that are affected by this policy. The total cost expended on these projects is anticipated to be $20 billion over the life of these projects, with an approximate annual spend of $3 billion. OMB expects this new process to result in a significant reduction in these amounts.

Second, the Federal Chief Information Officer Vivek Kundra will undertake detailed reviews of the highest risk IT projects across the federal government. Agencies will be required to present improvement plans to the CIO for projects that are behind schedule or over budget. Where serious problems continue to exist, there will be adjustments to Fiscal Year 2012 agency budgets.

Third, OMB’s Deputy Director for Management Jeff Zients will develop recommendations, within 120 days, for improving the federal government’s overall IT procurement and management practices. These recommendations will address the root-causes of problems plaguing federal IT projects and focus on proven best practices from inside and outside the federal government. They will include higher standards for project management practices and personnel, additional mechanisms for holding managers accountable for project results, and more rigorous review processes.

Together, these three steps will provide a strong start to our reforming of federal IT, which is essential to improving the effectiveness and efficiency of the Federal Government and giving taxpayers more value for their tax dollars.

READ OMB MEMO M-10-26 HERE...

-Peter Orszag, Director, OMB
READ MORE...

OMB's Werfel plugs financial modernization

Over the last two decades, it has not been unusual for a federal agency to invest millions of dollars, and as many as ten years, to modernize its financial management IT system.

But now, federal officials are re-thinking the way that financial management systems are upgraded, to save money, and also to better take advantage of rapidly changing technology.

Danny Werfel, the comptroller with the White House Office of Management and Budget, delivered his remarks on the subject of modernization as part of his keynote address to the AFFIRM CIO/CFO Summit meeting at the Capitol Hilton hotel yesterday.

Werfel says a change in the way that financial management systems are upgraded in agencies has been long overdue.

As hinted in recent months by other top White House IT officials, OMB is now considering a draft memo mandating that agencies adopt a new approach to financial management system modernization. An approach that favors modernizing specific modules in a system as needed, with the newest technology available, and within a much shorter timeframe to completion.

Werfel also acknowledged the need, in these modernization projects, for agencies to take the time to properly import legacy data from older financial management systems, in order to help agency top level managers to gain perspective on the mission of their department.

-Max Cacas, FederalNewsRadio.com
READ MORE or LISTEN HERE...