FinCEN contributed to BSA Direct problems: GAO

The Financial Crimes Enforcement Network did not manage consistently and effectively the development of a system aimed to improve sharing and analysis of Bank Secrecy Act data among law enforcement users. This contributed to the system's problems.

Issues that started at the project management level continued and compounded, and were not addressed at the executive level, the Government Accountability Office said in a report released today of its review of FinCEN's BSA Direct retrieval and sharing system.

For example, Mitre Corp. of McLean, Va., which assisted the agency with project monitoring, identified instances where FinCEN did not take action to reduce risk that the project would be unable to provide some of the originally planned functionality.

FinCEN, an agency of the Treasury Department, last week terminated the contract with EDS Corp. to develop the BSA Direct Retrieval and Sharing system, a data warehouse and information retrieval system.

With BSA Direct R&S, FinCEN aimed to improve law enforcement and regulatory users' ability to analyze and access Bank Secrecy Act data. FinCEN requires banks, money transmitters, casinos and other industries to report suspicious transactions and cash transactions of over $10,000. Individually or over time, these transactions could indicate money laundering, other financial crimes or terrorist financing.

'FinCEN's inadequate application of sound information technology investment management processes and controls to the BSA Direct R&S project contributed to the cost, schedule, and performance issues that have plagued the project from its inception,' said James White, GAO director of strategic issues. He provided the report for the Senate Appropriations Subcommittee on Transportation, Treasury, the Judiciary, HUD and Related Agencies.

GAO recommended that FinCEN develop a management plan in which executives regularly review investments' progress against commitments and take corrective actions when those commitments are not met.

'FinCEN runs the risk of having similar problems and similar results in the future unless better investment management processes and procedures are put in place,' he said.

In March, FinCEN Director Robert Werner issued a 90-day stop-work order because of his concerns over the project's failure to meet its program milestones and performance objectives. Outside experts conducted an assessment of the future viability of the system. FinCEN extended the stop-work period an additional 30 days in May.

FinCEN's law enforcement customers can continue to use FinCEN's Secure Outreach system to access BSA data to avoid any interruption of service and IRS' Currency and Banking Retrieval System for retrieval and analysis of BSA information.

About the Author

Mary Mosquera is a reporter for Federal Computer Week.


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