White House Overhauling Financial Systems Policy - InformationWeek

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3/23/2010
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White House Overhauling Financial Systems Policy

Current financial systems take too long to deploy, cost too much, and don't give federal agencies the right data, OMB official says.

The Obama administration is looking to change the way federal agencies deploy financial systems, Office of Management and Budget controller Danny Werfel said at a government financial management conference Tuesday.

Werfel criticized current processes for deploying financial management systems, saying that costs run too high, systems take too long to certify and deploy, and that deployed systems are poorly optimized and don't meet agency needs.

"There's a growing and acute problem with financial management system deployments," he said. "The bottom line is we want to deploy financial systems more quickly and cost-effectively than we are today."

New financial system requirements will be issued at the end of the month, with a fuller, new strategy for financial systems forthcoming, Werfel noted. He said that OMB will issue new policy and a "new way forward" that will aim to break the cycle of deployments that can take longer than 7 years and cost as much as a billion dollars, only to be outdated and too complex once they're launched.

Last week, OMB took its first step toward overhauling the way the government deals with financial systems, announcing that it would soon be closing the Financial Systems Integration Office (FSIO), which creates standards for federal financial systems.

"The software certification system was not working," Werfel said. "It took sometimes more than 18 months to go from point A to point Z and complete certification, and if we're going to be more agile, being locked into an 18 month timeframe just to go through the software certification process is not ideal. We wanted it to prevent us from buying software that didn't work, and we wanted it to help meet our business needs, and FSIO was about simplification, but none of these things happened."

In addition to the long timeframe involved, Werfel said, the certification process was actually leading to unnecessary changes in certain basic financial management functions, such as how agencies invoiced their purchases.

It remains unclear, however, where OMB goes from here with FSIO and systems certification. Until now, systems have had to be certified before agencies could deploy them, and it isn't clear how or whether that fact or the process behind it will change.

Werfel noted that some have told OMB that vendors should self-certify or that certification "locks in an oligarchy" of a few powerful financial management systems vendors, and promised that both government agencies and vendors would be involved in decisions about the process going forward.

In an interview, David Lucas, chief strategy officer of systems integrator GCE, bemoaned the sudden loss of FSIO, and said self-certification might be even less efficient than FSIO. "I'm not arguing FSIO was the perfect standards body, but it was one of the few forums where vendors, OMB, and agencies looking to modernize financial systems can go to discuss their needs," he said.

"Where there's a standards body, everybody is likely to listen more." Lucas also noted that, in a cloud computing and shared services model -- a direction OMB has expressly pointed over the last year -- interoperability and standards will be key.

The overwhelming public interest in federal spending as part of the stimulus act shows both a demand and need for better financial data, Werfel said. He pointed to the example of Recovery.gov, noting that the site got 400 million hits last year. That far outstrips interest in some agencies' financial statements two years ago.

Werfel cited one agency that saw only 400 hits on financial statements it posted online even though more than 400 people worked in that agency's financial office.

Furthermore, Werfel said, the data being produced doesn't always meet the needs of agencies or the public. For example, when the stimulus act spending information was first announced, the OMB couldn't answer important questions about how much money was going toward IT, or how much was going toward transportation projects in certain states.

Finally, there's even less infrastructure in place to perform advanced analytics, he said.

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