Labor to overhaul financial system

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

Labor Department Chief Financial Officer Samuel Mok, in a meeting with vendors interested in bidding on the new financial system, said he wanted to move from a 19th century system to a 21st century system.

"Providing the numbers and decision support to the department managers at the right time is very important," Mok told industry representatives July 15.

Using the current system, the Department of Labor Accounting and Reporting System (DOLAR$), officials spend more than 60 percent of their time on transactions and only about 10 percent of their time on decision support and financial control, Mok said. The new system, dubbed Dolly, would reduce time 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.

In reference to the 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 said.

The current system, implemented in 1989, is a mainframe system. Although it's a fine accounting system, it can't perform some of the initiative outlined in President Bush's Management Agenda, said Greg James, Labor's acting associate deputy CFO. Labor officials want to take advantage of new technologies and envision a Web-based, integrated system, he said.

The department is planning to release a request for proposals for the financial management system very soon, officials said. The contract will total about $50 million over five years.

Karen Alderman, executive director of the Joint Financial Management Improvement Program (JFMIP), said the burden of implementing a new financial system falls on Labor Department 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., and is reviewing products from PeopleSoft Inc. and Oracle Corp. The reviews are based on federal requirements, which are updated regularly.

"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 a little bit of a change. It's the type of thinking we need to take forward. We have got to begin to shape our commercial marketplace."