VA ends financial management modernization project

The Veterans Affairs Department terminated most of a $400 million project to modernize its financial management system due to resource constraints and the high risk of failure, the agency's top technology official said during a press briefing on Tuesday.

VA ended the integrated financial accounting system and data consolidation components of its Financial and Logistics Integrated Technology Enterprise program, Chief Information Officer Roger Baker said. FLITE was intended to manage physical assets and inventories.

The department still will move forward with the program's strategic asset management system, which will replace multiple legacy applications and provide better control of the supply chain, according to Baker. Agency officials will announce in coming weeks smaller projects to improve the quality of data feeding into the existing financial system.

"We'd like to make certain we can be successful [with a project] before we start," he said. "We can't do everything."

Baker and federal CIO Vivek Kundra said the Office of Management and Budget did not order VA to cancel the project, but OMB's announcement that all federal financial system modernizations would be halted did contribute to the department's decision. VA's own program to track progress and improve management of IT projects, which influenced the Obama administration's plans to monitor the federal IT portfolio, also played a role.

"Under the leadership of Roger Baker, we've seen a commitment to halt investments that do not produce results with a goal of making sure we're delivering on time, on budget and not continuing our culture of throwing good money after bad money," Kundra said.

VA will focus a portion of the freed up resources on the smaller projects, which "will be more impactful and lower risk than a forklift upgrade," Baker said. These projects will address weaknesses in the computer applications that feed data to the primary financial management system, to ensure accuracy of information and better tracking of money spent.

The department had not awarded a major task order under the FLITE program. Baker said VA spent $16 million thus far primarily on the integrated financial accounting system, though the Government Accountability Office reported in October 2009 that the department had devoted $90.8 million to the program as of September 2009.

This is the second VA financial management program to fold. Officials canceled the first -- the $472 million Core Financial and Logistics System -- after it failed during an initial deployment at a VA hospital in Bay Pines, Fla.