Financial systems lagging at several agencies

Financial systems lagging at several agencies


Data integrity issues and legacy systems continue to prevent some agencies from improving their flunking grades on financial management.

Officials from the Agriculture Department and the Agency for International Development told members of the Government Reform Subcommittee on Government Efficiency, Financial Management and Intergovernmental Relations that they may get bad grades for a few more years before improvement plans can move them to the head of the class.

The Defense Department's major offensive to compile and audit the fiscal 2000 financial statements for the central Defense agencies and 10 subsidiary reporting entities suffered defeat from poor systems and unreliable transaction and asset documentation, deputy inspector general Robert J. Lieberman said this month at a subcommittee hearing.

DOD entered more than $1.1 trillion in unsupported adjustments to its financial statement, Lieberman said, an improvement over the fiscal 1999 undocumented $2.3 trillion adjustment. Still, he said, DOD needs to make wholesale changes to its financial data reporting systems.

For the past decade, DOD has attempted to compile year-end financial statements even though it lacks systems capable of producing solid results, Lieberman said.

Defense officials have been evaluating the department's systems against federal financial management requirements and accounting standards, but they aren't moving quickly enough, Lieberman said.

In January, DOD began a program to oversee and monitor the department's efforts to develop and modify critical systems, he said. The department drafted an improvement plan, which it has failed to implement effectively, Lieberman said.

Long way to go

As of March, the department still lacked an inventory of its financial systems, although it had found that 19 of the 167 systems used in compiling year-end statements were compliant with federal requirements.

DOD officials report that with $3.7 billion they can make their systems comply with the standards by 2003, but Lieberman told the subcommittee that the time and cost estimates are overly optimistic.

Agriculture is waging a similar battle.

USDA, which is banking on the Foundation Financial Information System to improve its financial accounting, opted to keep many of its legacy systems early in the FFIS implementation, said Roger C. Viadero, the department's IG.

Problems getting the systems to interface with the new core package have caused data integrity problems, Viadero said.

Richard C. Nygard
'Retaining the feeder systems has had the effect of reintroducing the same bad blood after a transfusion,' he told the subcommittee.

Patricia F. Healy, USDA's acting chief financial officer, agreed that data integrity is key if the department is to receive a clean audit.

The department is using a data warehousing approach to access the information while it continues to work on cleaning up the information contained in some legacy systems, she said.

Healy told the committee that she doesn't expect a clean audit anytime soon. By attacking the root of the problems, however, the department should produce a solid year-end report in three years, she said.

Movin' on up

AID plans to move to the front of the class quicker than Agriculture and Defense, officials told lawmakers.

By the end of the year, the agency expects to have resolved nine material weaknesses that auditors found, said Richard C. Nygard, acting assistant administrator for management at AID.

Problems with the primary accounting system will be corrected this year with the deployment of a new core accounting system, the Momentum Financials Phoenix package from American Management Systems Inc. of Fairfax, Va., he said.


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