GAO: VA’s Multibillion-Dollar Financial System Overhaul Needs Hard Goals

The Veterans Affairs Department is largely on track with its financial management modernization program, though the program could benefit from establishing firm goals to better measure progress, according to the Government Accountability Office.

The Financial Management Business Transformation, or FMBT, program is one of three major ongoing IT projects at VA, along with the electronic health record modernization program and a new scheduling system, both commercial products developed by Cerner.

The latest financial modernization program started in 2016 as a shared services project with the Agriculture Department. The agencies worked together to pen a contract to deploy the cloud-based Momentum financial management system developed by CGI at an initial cost estimate of $887 million and timeline for full deployment by 2025. However, in December 2017, Agriculture pulled out of the deal, leaving VA to continue on its own.

Since then, VA has revised the cost estimate to upwards of $2.5 billion and projects full deployment by 2030.

The FMBT program follows two previous failed attempts to overhaul VA’s financial systems, including the latest—known as the Financial and Logistics Integrated Technology Enterprise, or FLITE, program—which was canceled in 2010.

The finance system being deployed today, dubbed the Integrated Financial and Acquisition Management System, or iFAMS, was launched at the National Cemetery Administration and Veterans Benefits Administration in 2020 and 2021, respectively.

Users in NCA offices reported general dissatisfaction with the new system and none of those surveyed “felt they had been provided effective training,” according to a GAO report. VA seemed to learn some lessons from that initial deployment, as VBA users “showed improved satisfaction compared to the NCA users.”

According to GAO, program officials have “developed metrics, established baselines and begun to measure operational benefits for NCA and VBA,” but have yet to establish goals for those metrics to hit based on the new setup, which “is a significantly more complex financial system than the previous system.”

VA officials told GAO the agency developed a baseline using performance metrics for the previous system, which were then adjusted as users learned the new system.

“Officials determined that generally understanding the metric performance as improving or not would allow them to see if performance was moving in the wrong direction. However, they also noted that in the future, the program might work to define more specific targets,” the report states. “Until the program identifies specific targets for performance, it will be limited to comparing metric results to the baseline. As such, the program may not be positioned to report that measurable progress has been made over time to fully meet the needs of the department and maximize the return on its multibillion-dollar investment.”

Overall, “The FMBT program’s organizational change management activities were consistent with four leading practices and partially consistent with the remaining three,” auditors wrote. The report urges VA to focus on increasing workforce skills and competencies, assessing each office’s readiness for change and fully assessing the results of change once implemented.

VA officials concurred with all six recommendations GAO included in the report.