State delivers better money management

Lima is online. The U.S. embassy in Peru is the first U.S. diplomatic post overseas to use a new Web-based financial management system developed for the State Department.

The Regional Financial Management System, which began operating in Lima and in Charleston, S.C., at the end of October, is part of a $38.4 million, multiyear project to modernize and centralize financial management now performed on a collection of aging and eclectic computer systems around the world.

In place of the separate financial management systems that now operate at scores of embassies and other diplomatic outposts, State plans to shift financial management to central computer systems based in finance centers in Bangkok, Thailand, and Charleston. A third finance center now operates in Paris, but is to be phased out.

By September 2003, each U.S. embassy will be linked to one of the department's two finance centers via the Internet.

For the embassy in Lima, that means financial management work now done in the embassy will reside on computers in Charleston. In addition to providing the Lima staff with more modern equipment and software, the new arrangement also means more detailed financial management information will be available to State's core accounting system in Washington, D.C., said Alan Evans, a department financial management official.

The State Department embraced the strategy of centralizing IT applications and making them accessible to overseas diplomatic posts via the Internet three years ago as a way to modernize an infrastructure department that officials themselves described as "mired in obsolete and no longer effective technology."

Some embassies, for example, perform financial management on 20-year-old computers with software that is nearly as old, Evans said.

A few embassies still record financial transactions on paper, which they ship back to Washington, said Zipora Brown, a vice president at American Management Systems Inc., which supplied financial management software for the system. The AMS software is tailored to meet particular State needs. For example, it can process purchases and contracts and issue checks in local currencies, Brown said. That is important for other U.S. agencies, because embassies provide financial services to them with overseas operations.

But because it is Web-based, the regional financial management system raises questions about its vulnerability to cyberattacks. Brown said "elaborate security" measures have been built into the system, including access limitations, encryption and the use of digital signatures to provide user authentication.

As embassies shift financial management operations from locally operated systems to the centrally run finance center systems, they will have less hardware to maintain and may need fewer employees. "At the embassies, all you need is a PC," Brown said.

By 2005, State modernization plans call for similar centralized computer systems to manage such functions as communications, procurement, human resources and logistics. By shifting work from embassies to management centers, the department contends it can free embassy staffers to concentrate on their diplomatic duties.

State officials asked Congress for $216 million for information technology upgrades in 2002 — $113.2 million more than the department spent in 2001.