DOT finds out technology is just a step on road to green

OMB's Linda Springer says technology alone can't guarantee a high score.

Improving financial management takes much more than technology, as the Transportation Department can attest.

The department installed a new financial management system last year but still got an unsatisfactory rating on the latest President's Management Agenda scorecard, issued by the Office of Management and Budget.

In addition to meeting the criteria laid out in the PMA, agencies must hurry to file annual financial reports with OMB 45 days after the end of fiscal 2004, instead of 120 days as before. OMB and department auditors also require quarterly statements.

'Technology in and of itself doesn't guarantee either a green score or being able to meet the Nov. 15 date,' OMB controller Linda Springer said. 'But it's certainly helpful.'

One of the best things about an integrated system is that it can generate monthly financial statements, said Transportation deputy chief financial officer Tom Park, who led the systems implementation.

'Instead of waiting until October to identify a problem, you've identified it in May,' he said. 'And the statements are not a big deal to pull out of the system, so we can use them as a tool to make sure our accounts are correct.'

Transportation recently completed the upgrade of its Delphi financial management system to an Oracle 9i database management system and Oracle Federal Financials 11.5.9i. The Delphi system had no custom code, so IT workers managed the upgrade over a weekend, Park said.

Cleaning crew

The PMA also calls for cleaning up and tightening controls over business processes. When OMB and inspectors general audit financial statements, they often ferret out weaknesses; a green score means no significant weaknesses.

Transportation had several, however, Park said. One bureau had problems with contracting procedures, another with budget reconciliation.

Even when an agency fixes financial weaknesses, it can take up to a year to get a better rating, Springer said. If an auditor uncovers a major weakness at the end of a fiscal year, the agency must wait another year for a higher score.

Agencies with antiquated systems are more likely to have significant weaknesses, she said. Most agencies find that once their new systems go live, many of the problems that saddled them with low PMA scores disappear.

'Having either the technology or the updated business processes in place is really just the first step to green,' Springer said. 'We are looking to make sure that agencies not only have the infrastructure, but that they are using the fruits of that infrastructure in day-to-day management.'

OMB is comfortable with Transportation's approach, which earned a green for progress. And the department has made enough headway correcting its weaknesses that Park anticipates a better rating.

'At this point, we feel pretty good about moving to green,' he said. 'If you look at agencies that are yellow, it's because many haven't worked through the financial information sharing and pulled it together for managers.'

Although an integrated financial management system is not required to get to green, it makes meshing financial data with performance data easier and less costly, Park said. 'It's very expensive to make those adjustments' on an older system.

Transportation is ready to meet the accelerated reporting requirement. 'Our old system absolutely would not have been able to produce the financial statements,' Park said. 'The new one pulls the data out'it's just a byproduct of normal operations.'

The monthly statements have already revealed, for example, that some bureaus had not posted their budget allotments from OMB. 'It pops out real quick if they don't have their allotments posted because you get negative numbers,' Park said. The auditors should have Transportation's financial statements within a couple of days after the fiscal year ends Sept. 30, he said.

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