HHS has plan to boost financial health

Department expects six benefits from new system

  • Standard operating procedures across all agencies

  • Ability to audit transactions from inception to completion

  • Faster and more efficient creation of financial statements

  • Accurate business intelligence for decision-makers

  • Elimination of redundant systems, processes and databases

  • More secure systems environment
  • Managers in the Health and Human Services Department complain that their financial systems are 'held together with duct tape and baling wire,' a department executive said, but they'll have to wait a little longer for something better.

    HHS this month is rolling out an initial version of the Unified Financial Management System at the Centers for Disease Control and Prevention, and at the Food and Drug Administration. But other bureaus will have to wait until the department finishes testing the new system.

    HHS will activate the most useful features in the initial release of the new system'general ledger account balancing and payroll'at CDC and FDA. CDC also will get grants accounting functions early next year. The partial implementation will give HHS time to identify any system defects before wider deployment, department officials said.

    'UFMS will transform the way we do business at HHS,' said Kerry Weems, principal deputy assistant secretary for budget, technology and finance.

    BearingPoint Inc. of McLean, Va., is the integrator for HHS' financial management implementation. The department is using Oracle11i Federal Financials, with an Oracle9i database, on a Sun Microsystems SunFire 15K enterprise server.

    UFMS will reduce the number of the department's financial systems from five to two. Although CDC and FDA are the first agencies to go live with the system in its standard configuration, a customized version began running at the National Institutes of Health last fall.

    HHS plans to deploy the full release at CDC and FDA in April and to complete the rollout across all HHS agencies by 2007, Weems said. The total cost of the system will be $700 million.

    Once all agencies are using UFMS, the NIH system will be aligned with the standard configuration.
    NIH had installed components of the system that enhance budget distribution and core accounting capabilities and replaced the accounts payable and receivables system for its E-Travel program.

    'We struggle every year to make a clean audit because of our financial system. We want to make a slam dunk,' Weems told lawmakers at a recent hearing of the House Government Reform Subcommittee on Government Efficiency and Financial Management.

    HHS managers acknowledge that their systems are cobbled together and need an upgrade, he said. 'Our managers are saying, 'Get me this now.' We need to get to these benefits as soon as we can,' Weems said.

    UFMS will reduce the complexity of coordinating financial information across the department by:
    • Reducing the resources needed to perform financial operations

    • Lessening the transmission of information between administrative and financial systems

    • Streamlining internal and external financial reporting.

    GAO has doubts

    Even though HHS has decided to slow the system's deployment, at least one observer questions the rollout at all. The Government Accountability Office recommends that no installations begin until HHS has the system fully ready for use.

    Requirements for the financial system are not adequately defined, Jeffrey Steinhoff, GAO's managing director for financial management and assurance, told lawmakers. 'Testing should be seeking to find deficiencies in the system,' he said, not just that the system can perform.

    Weems said HHS has adopted a number of GAO recommendations since its most recent review. It has further defined the systems' requirements, he said.

    The department has also held unit, integration and user acceptance tests and is conducting four mock data conversions instead of two. The components to be deployed in April are in testing now, Weems said. 'We're trying to do both: keep going forward and going back to examine requirements. We don't want to hold back the full system.'

    Steinhoff said the department should base its implementation on completing testing rather than on a set schedule. 'That way you assure that you don't advance a step until you've determined you've completed the last step,' he said.

    As the department begins its rollout of UFMS, the Centers for Medicare and Medicaid Services is testing its Health Integrated General Ledger Accounting System, or HIGLAS, a separate system for transactions with Medicare contractors. UFMS and HIGLAS are integrated only for financial reporting because CMS processes a huge volume of payments to third-party medical insurance contractors: 1 billion Medicare bills annually.

    Many agencies are implementing new financial management systems to improve the speed and accuracy of integrated information for financial reports and decision-making. HHS faces some unusual challenges in implementing its system because it depends on contractors, such as community health centers, states and other specific partners, to perform much of its mission. The department also administers the Indian Health Service.

    'Having these contractors out in the states adds to the challenge of getting information. And we have to have good information to explain how money is spent,' Weems said.

    Reader Comments

    Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

    Please type the letters/numbers you see above