OMB to review 20 financial system modernization projects

Obama administration officials said today they plan to freeze financial systems going through a modernization effort even if the projects are well-managed to make sure they are in sync with a new policy of getting the systems launched faster and hitting the critical needs.

“We believe the way projects have been constructed and thought of over the past decade is not an optimal efficiency point,” said Danny Werfel, controller of the Office of Federal Financial Management in the Office of the Management and Budget.

Related story:  OMB puts brakes on financial systems modernization

OMB officials expect to review roughly 30 financial systems projects, and they have confirmed 20 programs, including the:

• Agriculture Department’s Financial Management Modernization Initiative
• Commerce Department’s Commerce Business Systems
• Education Department’s Financial Management Support System
• Energy Department’s CFiManage
• Environmental Protection Agency’s Financial Replacement System
• Health and Human Services Department’s NIH Business System
• Health and Human Services Department’s Healthcare Integrated General Ledger Accounting System
• Homeland Security Department’s Transformation and System Consolidation
• Housing and Urban Development Department’s Integrated Financial Management Improvement Project
• Interior Department’s Financial and Business Management System
• Justice Department’s Unified Financial Management System
• Labor Department’s New Core Financial Management System
• State Department’s Joint Financial Management System
• Transportation Department’s Delphi
• The Internal Revenue Service’s Integrated Financial System/CORE Financial System
• The Bureau of Public Debit’s Oracle e-Business Suite
• Veterans Affairs Department’s Financial and Logistics Integrated Technology Enterprise
• National Science Foundation’s Financial Accounting System
• Office of Personnel Management’s Consolidated Business Information System and
• Small Business Administration’s Oracle Administrative Accounting.

Werfel said agencies may be managing their projects well as they keep them on time and within cost, but OMB officials said  there likely are areas where they can still save money.

"Just because you are on cost and schedule with building a certain thing you're building doesn't mean that there's not an opportunity to rethink that and to save money and cut costs,” Werfel said.

In June, the administration froze modernization projects on agencies’ financial systems, so OMB officials could review them. Officials said today’s projects are too large and too complex. They also have such broad scopes that continue to grow when, instead, the projects should center around essential business needs, officials have said.

“One of the challenges we see when it comes to the complexity of the federal IT ecosystem is everything ends up being over-engineered, whether it has to do with longer procurement cycles,” said Vivek Kundra, the federal chief information officer. “Therefore, agencies end up creating these monolithic requirements that are hundreds of pages long.” The projects then face the budgeting process, often in the form of continuing resolutions, Kundra said. The result is unmet requirements and technology that is not set up.

“This monolithic approach to deploying federal IT is not working,” Kundra said.

Officials want projects that are focused on a smaller set of critical needs, that deploy more quickly, and have vigorous management of the program.

OMB officials have said agencies likely would spend a total of $20 billion over the life of the projects, with an addition $3 billion spent annually to maintain them.

Financial systems that are not undergoing modernization aren't be affected by the new directive. OMB instead wants to review modernization projects to financial systems.