OMB to Tackle Financial Systems

Developing financial management systems that work has been a big, persistent pain for agencies for years and years. But now the Office of Management and Budget wants to see if they can provide a solution. The office is getting ready to issue new rules to try to rein in the runaway systems, according to an article by Jason Miller at Federal News Radio.

The upshot of the memo: develop financial systems more incrementally to control costs and improve performance. According to a draft memo written by OMB director Peter Orszag, the White House "would halt all new financial management system modernization projects worth at least $10 million, and all existing task orders for ongoing development efforts worth more than $500,000," according to FNR. Agencies would have to have their financial management modernization plans approved by OMB.

Incremental development projects would be no longer than 90 days and the entire project couldn't last more than two years. OMB also would back off a mandate to use shared services, telling agencies to use them only when it makes sense.

The memo seems to pull from the U.S. Government 2009 Financial Report, which was released on Feb. 26. The report "said agencies must reconsider expensive, long-term investments in favor of shorter-term, more efficient information technology solutions . . . ," according to a March 5 Nextgov article. However, OMB didn't follow the report's recommendation to rely more on shared services.

OMB's approach has some risks, however, FedSources' Ray Bjorklund told Nextgov at the time:

I question whether there are going to be adequate solutions out there that meet OMB's objectives for quick implementation, without running at cross purposes with Congress and the [Government Accountability Office]. Requiring agencies to use short-term solutions that may fail to meet essential [financial management] requirements is a challenging path to take. Participating agencies must be prepared for any ensuing criticism by the auditors.