Labor to overhaul financial system

The Labor Department is planning to overhaul its 14-year-old financial management system to increase real-time reporting and analysis of the agency's finances.

In a meeting with vendors interested in bidding on the new financial system, Labor's chief financial officer, Samuel Mok, said he wanted to move from a 19th-century system to a 21st-century one.

"Providing the numbers and decision support to the department managers at the right time is very important," Mok told industry representatives last month.

Using the current system, Labor's Accounting and Reporting System, officials spend more than 60 percent of their time on transactions and only about 10 percent on decision support and financial control, he said. The new system, dubbed Dolly, would reduce time spent on transactions to less than 20 percent and increase decision support and control time, he said.

"I want to move from a transaction-driven [system] to an analytical organization," Mok said.

Referring to rules guiding competitive sourcing of government jobs to the private sector, Mok said he wanted a system that could rapidly compute the full cost of business. "If we don't know a true cost, how can we competitive source?" he asked.

The current system, implemented in 1989, runs on an IBM Corp. mainframe. Although it's a good accounting system, it can't perform some of the initiatives outlined in the President's Management Agenda, said Greg James, Labor's acting associate deputy CFO. Department officials want to take advantage of new technologies and envision a Web-based, integrated system, he said.

Labor officials released a request for information in June and said they plan to release a request for proposals for the financial management system soon. The contract will total about $50 million over three years beginning in September.

Karen Alderman, executive director of the Joint Financial Management Improvement Program (JFMIP), said the burden of implementing a new financial system falls on Labor employees.

"Most of the cost of new systems is in successful implementation," she said.

JFMIP, the organization responsible for setting standards for agency financial management systems, has certified systems by SAP Public Services Inc., American Management Systems Inc. and Digital Systems Group Inc.

"The ability for systems to support common federal requirements is a little like walking on water," Alderman said. "It's a lot easier done when it's frozen."

Agencies should become more proactive about their requirements for commercial financial management products, said Jerry Williams, former chief of federal financial management systems at the Office of Management and Budget.

"We have to define what our requirements are," he said. "It's the type of thinking we need to take forward."