OMB’s pause of financial systems had little effect on cost, schedule

GAO reviewed the administration\'s implementation of the July 2010 memo calling for a government-wide review of financial management projects. Auditors found ab...

(Naba Barkakati, GAO’s chief technologist, joined In Depth with Francis Rose to discuss the report.)

The Office of Management and Budget’s decision to pause major agency financial management projects in 2010 didn’t affect most of the programs’ cost or timeline.

The Government Accountability Office reviewed the implementation of OMB’s July 2010 memo and found 13 projects estimated no change in their long term costs, and 16 said their schedule remained the same.

The audit agency also said OMB approved 17 projects, partially approved six, shut down one and still is reviewing seven others. Of those approved or partially approved, OMB said 20 were considered low or moderate risk projects.

“[S]everal agencies reported that they narrowed the scope of their current project plans to focus on implementing more critical business needs first as a result of the June 2010 memorandum,” auditors wrote in a report to Sens. Tom Carper (D-Del.) and Scott Brown (R-Mass.), chairman and ranking member of the Homeland Security and Governmental Affairs Subcommittee on Federal Financial Management, Government Information, Federal Services and International Security. “They noted that this rescoping had the effect of delaying their efforts to improve accounting and reporting functions. Agencies also reported other challenges related to their financial system projects, including standardization of internal processes or data and funding delays.”

GAO found five agencies said the cost of their projects increased and four said their programs decreased because of OMB’s reviews. Seven agencies were unsure of the effect of the pause.

Additionally, six agencies said the pause increased the time it would take to complete implementing the new system, while three said it decreased their time and four were unsure.

“For one agency, which is also a shared service provider to other agencies, OMB did not approve its project to upgrade its accounting software to the current version,” GAO said. “The agency stated that this action adversely affected its ability to maintain system security, maintain vendor support for aging software, upgrade existing software and implement new technology — all factors that will also affect its customers.”

Auditors also reported another agency said OMB postponed its modernization efforts for three of its components, and this action increased the cost of achieving unified modernization across the agency and requires additional investments to maintain existing legacy systems for a longer period of time.

Agencies highlighted several remaining challenges:

  • 12 of 22 agencies reported standardization of internal processes or data is a major or moderate challenge.
  • nine of 22 agencies reported that funding delays are a major or moderate challenge.
  • nine of 22 agencies reported that funding priorities are a major or moderate challenge.

GAO also said OMB needs to finalize the revision of A-127. The White House issued a draft revision to agencies in October 2010, but as of October 2011, it did not say when the updated circular would be completed.

The report comes as the Treasury Department is leading an interagency effort to improve financial management processes. The 12-step plan includes invoice processing data standards, a single invoice portal and a host of other ways to standardize certain aspects of financial management.

In a Federal News Radio survey of Chief Financial Officers in December, 36 percent of the executives said the 12-point plan is moving too slowly and 45 percent said it’s making a difference at their agency.


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Agency financial systems still deficient

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Agency CFOs feel strain of impending budget cuts

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