OMB to meet with agencies to discuss financial systems

( ) - A problem with financial management systems is they are over-engineered, says federal CIO Vivek Kundra. James Kegley

White House officials next week will start meeting individually with federal agencies to lift a freeze on the development of financial system projects they instituted in June, officials said on Friday.

The Office of Management and Budget on June 28 halted all federal financial system modernizations -- about 30 projects -- to shrink their scope and timetable in hopes of improving the cost-efficiency of the networks. After a govermentwide review of financial systems found most were behind schedule and over budget, OMB diagnosed the problem: the systems' requirements were beyond what agencies actually need.

For example, the inspector general at the Homeland Security Department released a report on Friday saying, "DHS faces numerous challenges in implementing" its financial management system. According to the report, DHS had not estimated all project costs and its chief information officer had limited involvement with the initiative, increasing the risk the new system would not mesh with the department's other IT systems.

"One of the challenges we see comes [from] the complexity of the financial management systems -- everything ends up being over-engineered," Vivek Kundra, federal chief information officer, said during a call with reporters on Friday. "This monolithic approach to federal IT isn't working. This is not about preventing modernization. This is about making sure the IT dollars we're investing within the federal government are producing results."

Going forward, agencies will be discouraged from biting off more than they can chew and encouraged to stick with a set of core requirements and priority needs, officials said. "There are basic requirements that all systems must have to be able to do basic accounting," OMB Controller Daniel Werfel said during the call.

OMB wants agencies to design targeted systems with tighter milestones, even if their current financial system project is on track. The aim is to roll out projects more rapidly and cheaply.

Each agency is evaluating its modernization plan to identify gaps between its goals and new guidelines included in the June 28 memo , which initially directed the agencies to stop work.

OMB will approve individually an agency's plan for developing a financial system once processes are consistent with the new policy. Officials had tentatively scheduled to meet with DHS and the Energy and Veterans Affairs departments on Friday and then confer with officials at the Interior, Commerce, and Housing and Urban Development departments on July 16.

On Friday, OMB officials said the meeting with DHS financial system officials was postponed because key personnel were unavailable, not due to the inspector general report. A new date for the review has not been set.

The memo demands agencies' senior managers more closely oversee development and split projects into simpler segments that take no more than two years to complete. Past projects have spanned a decade. Senior managers often have stopped monitoring projects once development has started.

Software certification requirements also have delayed some procurements by 18 months and created additional costs. So far, the government has verified only seven products as compliant with core financial system requirements. Officials said those test procedures for software now are outdated.

The memo has eased the certification process by requiring vendors to self-certify their products, thereby shifting accountability for software performance to the vendor.