Audit mess tied to schedule woes

While members of Congress and the General Accounting Office last week blamed inadequate information technology systems for agencies' inability to create accurate financial statements, federal financial officials complain they are unable to purchase quality financial management systems (FMS) through the government's mandatory schedule program.

Commercially available FMS software packages are widely viewed as a way to help agencies produce cleaner financial statements. For more than a year, federal chief financial officers have been wrestling with methods to improve the schedule to buy FMS systems, but they have not yet outlined the requirements that will be the basis for the solicitation for the next set of FMS contracts.

"We are waiting for the requirements to be developed," said a spokesman for the General Services Administration, the agency that will procure the new systems. "[The process has] been delayed for several months, and we don't know when [the requirements] will be completed."

At issue are billions of dollars in discrepancies, missing equipment and overpayments, according to GAO. In conducting the audit— said to be the largest audit in history— the agency was unable to render an opinion on the accuracy of a consolidated federal financial statement, partially because of weaknesses in financial systems, GAO representatives said last week.

Widespread Criticism

FMS software provides federal officials with the financial information they need to manage operations and hold employees accountable. Agencies buy software through a mandatory schedule administered by GSA. Because of widespread criticism of the schedule, the Chief Financial Officers Council and the Treasury Department's Joint Financial Management Improvement Program have undertaken a project to replace the schedule with a series of contracts better able to meet agencies' needs.

Vendors and agency officials said the process of buying off the FMS schedule is hampered by duplicative testing and certification. GSA evaluates and approves products for acceptance on the schedule, but agencies then require more testing to ensure the products meet their unique needs.

In addition, some of the products most craved by agencies— including items from companies such as PeopleSoft Inc. and SAP America Inc.— are not even on the schedule.

The schedule, which includes products from nine vendors, will expire Sept. 30.

R. Schuyler Lesher, deputy chief financial officer at the Interior Department, said agencies need more information than is available through the current tests to certify systems for sale on the FMS schedule. "The basic problem has been that the schedule has not been effective enough in terms of what facets of systems are being tested," Lesher said. "We are working with GSA to get a better way of testing products and sharing [test results] with the people who are buying."

Vendors are equally critical of the program. Wayne Bobby, director of government financial solutions at Oracle Government, Education and Health, said it can take agencies more than a year to purchase systems through the FMS schedule because of the excessive evaluation process. He said the systems purchased often do not perform as expected and need additional development work.

Karen Alderman, executive director of the Joint Financial Management Improvement Program, said she has requested $3 million from Congress to set up a testing program that will produce detailed "consumer reports" on financial management products offered through the schedule. The hope is that the reports will help agencies save time in choosing and putting into place new financial management systems, Alderman said.

Agency officials assert that the systems they buy through the schedule are unable to meet their needs because agencies have been unable to get detailed test results produced during GSA's certification process.

"One of the problems with the software that gets onto this schedule is that there's no clear way for agencies to evaluate it," said Frank Sullivan, deputy assistant secretary for financial management at the Department of Veterans Affairs.

Consequently, agencies have been purchasing software that, despite GSA's certification, does not live up to expectations. Paul Gilbreath, director of the Education Central Automated Proc-essing System at the Education Department, said a financial management product the department bought from schedule vendor Computer Data Systems Inc. fell short of its needs. He said Education personnel had to spend a lot of time reformatting the product. One Education insider said the department has spent nearly $1 million on CDSI software fees and probably another $5 million to get the product installed.

A spokeswoman for CDSI said some software revamping is expected when dealing with federal agencies and their unique accounting requirements. CDSI vice president Steve Penyak said his company has worked steadily to make sure its solution is a success at Education. "It's a very complex environment," he said, "and we feel [the system] is performing well."

Sherry Amos, PeopleSoft's vice president of industry strategy for education and government, said GSA's tests do not permit the flexibility needed to test whether a product is suited to the specific business needs of each agency. "Agencies want this test changed so it will be more meaningful to their actual operations," she said.

Gilbreath said he favors the idea of detailed "consumer reports" on products on the schedule. He said Education officials might consider dropping the CDSI product for something new if more robust products are added to the schedule. "The product I have now is not strong enough to make me loyal," he said.