Bureau of Public Debt upgrades accounting system

The Bureau of Public Debt has purchased a new accounting system to help manage $1.8 trillion in investments made by federal agencies in government securities, including the Social Security Trust Fund and military pensions.

The Invest One software from SunGard Investment Systems Inc., Hinsdale, Ill., is the same technology used by many of the nation's largest banks and investment funds to keep track of assets. The software replaces three legacy systems consisting largely of customized software.

"What we were after was basically automating," said Keith Rake, deputy assistant commissioner with the bureau's Office of Public Debt Accounting. Among other features, the $9.1 million, seven-year contract with SunGard, awarded last month, will enable the agency to automatically obtain data about the latest market prices of government securities.

Rake said the new system also will offer online access to customers who want to buy or sell investments or check up on their accounts, ending the need for them to fax in their requests.

The bureau tracks more than 200 separate federal investment funds and actively manages 17 of those funds. Agencies invest surplus money until they need it to pay unemployment compensation, cover defaults on government-backed loans or disburse retirement benefits, among other purposes.

A mainframe-based system, Invest One is not "the most modern technology," said Adam Tucci, project leader for the bureau's Investment Accounting System. "But we're purchasing systems that have been doing what we need to do for many years."

Tucci said the agency considered building a new system itself but decided that commercial products could meet most of its requirements without a two- or three-year development effort. "We went out with about 200 requirements, and the system we ended up purchasing meets all but seven of them," he said.

Agency customers will not see immediate changes in how they interact with the bureau. Rake said the agency is deciding whether it will offer agencies Invest One's current dial-up access capabilities or wait up to two years until it can provide more advanced Internet access than Invest One currently supports.

Victor Correa, treasurer and financial officer with the Government National Mortgage Association (Ginnie Mae), said he is looking forward to the upcoming service because it will simplify the association's procedures for executing transactions and improve security.

"We are limited in the information they can give us [now]," he said. Online, the association will have more investment choices "that will probably benefit our cash flow," he said, and employees will have access only to data they need to perform specific tasks. Ginnie Mae's $6 billion in investments backs government-issued mortgages and is used to pay banks if a borrower defaults.

Not every agency will jump to take advantage of online access, however. "I'm not so sure it will give us any information quicker because the people at Public Debt are very efficient," said Richard Buschman, investment manager for the Defense Finance and Accounting Service's Investment Trust Funds.

Buschman is in charge of, among other funds, $160 billion in military pension assets. He added that it is not clear yet whether the bureau's new system will be compatible with those at DFAS.