VA turns to vendor in bid to salvage flawed financial system

An independent review will recommend how VA can get the project back on track, CIO Robert McFarland says.

The Veterans Affairs Department is trying to figure how to put its Core Financial and Logistics System back on track.

VA this month hired PricewaterhouseCoopers LLP to scrutinize its troubled financial management project. The New York company will conduct a four-month review of CoreFLS and make recommendations to set it right, VA CIO Robert McFarland said. VA pulled the plug last summer on a pilot program to test the new $472 million system at the Bay Pines Veterans Affairs Medical Center in St. Petersburg, Fla. Bay Pines has reverted to legacy financial software.

PricewaterhouseCoopers will take an accounting of VA's current financial status, determine what it will take to remedy the material weaknesses in its financial systems and recommend how to proceed with the CoreFLS project, McFarland said.

VA hired BearingPoint Inc. of McLean, Va., as the integrator to implement CoreFLS. The project's hurdles have turned on converting existing VA data and creating interfaces to VA's outdated financial systems.

Problems with CoreFLS led to substandard patient care and services at the Bay Pines hospital, according to inspector general findings.

'We found out that the implementation and integration that we were doing on that pilot was not going to work for us,' McFarland said. 'We then canceled the pilot and started looking at our environment much more in depth in hopes of coming away with a redesign that will implement a standardized system,' he said.

A review board headed by the CIO is examining the CoreFLS pilot and the overall program to better modernize VA's financial and accounting processes.

The department's IG has said inadequate contracting and monitoring practices hindered CoreFLS deployment. Most of the legacy systems that must integrate with the new financial system contain inaccurate data because they have not been used properly, the IG reported last fall.

VA's evaluation of CoreFLS comes as the Office of Management and Budget is establishing an e-government project to consolidate federal financial management. Under the Financial Management Line of Business initiative, several agencies will provide financial systems and services to other agencies.

The initiative could affect CoreFLS. Under the Lines of Business initiative, OMB is strongly encouraging agencies to use the shared-services providers. Agencies that elect to use their own financial management systems will have to justify this to OMB.

But OMB won't require an agency to use the LOB financial providers unless the shared services meet the agency's needs, said Samuel Mok, co-chairman of the financial management project and chief financial officer of the Labor Department.

'I don't think it is OMB's intention that the Financial Management Line of Business is a vehicle to solve train wrecks,' Mok said. 'Any agency that can use the common system, please do. For those who can truly demonstrate a unique need, we don't want to standardize for standardization's sake.'

Nonetheless, a senior government official familiar with the financial management initiative said VA would be expected to consider migrating to a shared-services provider as part of its plan to resolve problems with CoreFLS.

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