Coast Guard Completes Financial System Modernization

The U.S. Coast Guard updated its financial management system as of Jan. 7, marking a new chapter in the military branch’s efforts to shift away from legacy technology systems for more secure, efficient software.

Announced by the Department of Homeland Security Management Directorate, the Coast Guard’s new system that manages financial assets and procurement information is called the Financial System Modernization Solution.

The FSMS was initially set to roll out in November 2021, but suffered setbacks due to integration problems. 

Now live, the FSMS is equipped with automated controls to help streamline accounting and invoicing measures, along with enhanced security features.

“This is truly the beginning of a new era for the United States Coast Guard’s Financial Management and Procurement Services,” said Rear Adm. Mark Fedor, the assistant commandant for resources and chief financial officer for the Coast Guard. “I’m honored to help lead the Coast Guard through this financial transformation and confident the Service will be more efficient, adaptable to our dynamic operational environment, and better stewards of the taxpayers’ dollars. Hundreds of people have invested thousands of hours to make this vision a reality, so it’s fitting to celebrate this milestone achievement.”

The FSMS will help the agency manage more than $12 billion in annual funding. It is comprised of 13 separate financial systems now consolidated together, Coast Guard officials previously wrote, and will play a large role in processing vendor payments for various contracts. 

“Modernizing our financial support systems is vital to the Department of Homeland Security and is one of our top priorities,” said Homeland Acting Chief Financial Officer Stacy Marcott. “The new system will vastly improve the U.S. Coast Guard’s business systems, help employees be more productive, and allow them to achieve more reliable results when paying bills, procuring goods and services, reporting and managing budgets, and much more.”

The Coast Guard is the third branch of Homeland Security to modernize its financial processing systems, with the Countering Weapons of Mass Destruction Office and Transportation Security Administration updating their systems several years earlier.

Craig Bennett, the deputy assistant commandant and deputy CFO, explained that the modernization overhaul had been 19 years in the making.

“The old technology from a cybersecurity standpoint is risky, and from a business process standpoint it was inadequate,” Bennett told Nextgov. 

He added that the system was built from a commercial Oracle system and further tailored by IBM to suit the Coast Guard’s operational needs. 

“This gets us modern technology that’ll be cyber secure, that’ll be hosted and maintained without all the customizations so we’re not at risk when a vendor stops supporting a particular piece of the system,” Bennett said. Moving forward, Homeland’s broader vision moving forward will use the FSMS as a model for future modernization efforts. 

Modernization within the federal government is often an arduous task, culminating in several years’ worth of integration work to deploy new information technology systems. 

Back in 2021, the Government Accountability Office identified several agencies using legacy software systems that were deemed most in need of updates. Both the Department of Defense and Homeland Security were named in the report.

The GAO cited known security vulnerabilities and a rise in procurement and business operation costs as two of the several reasons these agencies required updated software systems. 

Editor's note: This story was updated to include comments from the Coast Guard's deputy assistant commandant and deputy CFO.