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Background Scope and Methodology Major Components of the District's System of Accounting and Reporting Are Not Operational
SOAR User Expectations Have Not Been Fully Met
SOAR Project Costs Have Significantly
Exceeded Original Estimates GAO
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| FY 2001 process | FY 2001 results | FY 2002 process | FY 2002 modifications | FY 2002 expected results | |
| Budget developed without goals | Agency budget allocation decisions and programmatic narratives did not support Mayor's priorities or Citizen Summit goalsa | Budget will be guided by goals | FY 2002 budget manual articulates Mayor's priorities, includes performance measures, and establishes clear funding targets that agencies must achieve during the baseline budget development | Budget development and presentation will clearly support goals | |
| Top-down development of budget | Budget failed to completely account for one-time costs only known to the agency for FY 2000 and FY 2001 | Bottom up development of budget | Agency baseline budgets will be requested at the detail level. Changes from FY 2001 reallocated budget will be identified during the agency baseline submission | Budget will be developed with clear explanation for each change from the FY 2001 congressional budget at the responsibility center level | |
| Unilateral | Baseline budget did not receive acceptance by executive or legislative branch | Collaborative | Draft copies of budget manual were distributed by all agency directors and CFOs along with stakeholders. Input was requested and used to finalize the FY 2002 budget manual | Agency directors and District stakeholders will be active participants in developing and shaping the FY 2002 budget | |
| Reactive | Fostered a perception of incompetence, detracted from substantive issues, and jeopardized the FY 2001 Mayor's budget | Proactive and guiding | FY 2002 budget manual provides "forward thinking" process that anticipates stakeholder requests for detailed information. This process provides information needed to develop a sound baseline budget that will allow stakeholders to focus on policy issues | The budget process will provide a structured format for policy development and will anticipate inquires on the content and development of the budget |
a. On November 20, 1999, as part of
Mayor Williams' Neighborhood Action initiatives, more than 3,000 residents
came together at this summit to review and comment on the Mayor's Draft
City-Wide Strategic Plan and identify citywide goals.
Source: Office of the Chief Financial Officer, District of Columbia
Government.
Because the District was in the early stages of budget formulation, we were not able to assess whether these improvements will achieve their intended results. Further, the District was unable to provide us with any documentation to support that it had undertaken a structured and disciplined approach to implementing these actions.
In order to address its budget processes and systems, the District contracted with the Government Finance Officers Association (GFOA), a leader in state and local budgeting and finance, to help evaluate how well OBP was structured to carry out its budget and financial functions. The report,16 which GFOA issued on November 2, 2000, focused on an organizational review of the budget office internally and as it related to other District agencies.
GFOA found that OBP faced organizational and personnel management issues. For example, the study cited the following issues: organizationally, there is little communication or coordination between OBP divisions during major budget cycle periods; OBP lacks clear organizational and management policies regarding budget development and execution; staff need training on the current financial management system and the acquisition of analytical tools to perform financial analyses; and OBP staff have not had fiscal analyses sufficiently incorporated into their typical duties, such as expenditure and revenue analyses, cost-benefit analyses, and program outcome analyses. OBP officials stated that, as a result of the GFOA recommendations, they have made a number of staffing and organizational changes, which were consistent with many of the initiatives for change they had already started. OBP officials stated that they have taken the following actions:
According to District OBP officials, the above changes have improved budget forecasting activities as well as provided greater control over budget execution and fiscal oversight.
We agree that OBP needed to address personnel and related organizational issues in order to better align its operations and facilitate and enhance its ability to carry out its budgetary and financial responsibilities. However, because these efforts were only in the early stages of implementation, we could not assess their impact on OBP's operations or on its ability to successfully implement a budgeting system in the future.
Until the District develops a disciplined and structured approach to its business process reengineering efforts for its budget process, it will continue to develop its budget using a process that is cumbersome and inefficient. Until a budget formulation and execution system is implemented and fully integrated with its financial systems, the District's budget is not likely to reflect the cost of services at the program level because the District currently does not have a way of measuring those costs.
As originally envisioned, SOAR, was expected to provide general ledger, grants management, fixed assets management, budget execution, cash management, and budget formulation functionality. SOAR was expected to strengthen control over appropriations and spending, provide enhanced tracking of grants and projects, automate and streamline the financial management process, record obligations as incurred, track payments and disbursements, monitor performance measures by program and organization, prepare timely, accurate, and reliable financial reports, expedite the month-end closing process, and provide the ability to input and control data on-line. Overall, the District and its residents were expected to benefit from improved financial management and reporting of public services and resources. Our discussions with SOAR pilot agencies indicate that these expectations have not been realized.
Five District agencies were used as pilot agencies during the systems implementation- the District of Columbia Public Schools (DCPS), Department of Public Works (DPW), Department of Human Services (DHS), Metropolitan Police Department (MPD), and Financial and Technical Services. The pilot program provided an opportunity for agencies with unique requirements to customize the implementation of SOAR in their agencies. The pilot program also provided a test and "exercise" of the implementation process as well as a test of the function of the new system. The pilot was designed to identify problems and develop solutions prior to full implementation.
We contacted each pilot agency to obtain officials' views on SOAR's current operational status. In conjunction with our discussion with the pilot agencies, we reviewed the expectations communicated in a December 1997 presentation in which the OCFO provided a detailed list of the former financial management system's deficiencies along with the anticipated capabilities of the new financial management system that were expected to remedy these deficiencies. The following are examples of current operational issues identified by officials at the pilot agencies where anticipated resolutions did not materialize.
Our work as well as other studies have shown that problems associated with requirements management are key factors in software projects that do not meet their cost, schedule, and performance goals. By not clearly identifying and defining user requirements up front, the financial management system is currently not able to fulfill the financial management and reporting needs of its users.
Training is a critical component of successful implementation of a new financial management system and can be accomplished through a formal program, on-the-job training, and the use of experts assigned to each agency. We previously reported17 that from January 1998 through April 1999, 42 percent of SOAR users did not attend scheduled training. In December 2000, the SOAR PMO identified a core training curriculum consisting of nine courses. According to the SOAR PMO, less than 50 percent of the SOAR user community had completed the new core training curriculum.
The SOAR Program Director told us that conflicting priorities contributed to the low attendance rate, including the large amount of effort needed to complete the District's annual financial statements and prepare for its annual audit. According to the same official, another factor was the lack a: complete buy-in by the users of the new system. In addition, a District official stated that many reported transaction errors resulted from a lack of understanding of the impact of transactions and their effect on general ledger accounts, coupled with the learning curve experienced with the implementation of the new system. Furthermore, several pilot agency officials stated that the overall training was generic and not specific to the District's needs.
In our June 1999 report,18 we stated that the District planned to pilot a job certification program for employees in financial positions. Under this program, employees would be certified for financial positions based on training and testing. In November 2000, the SOAR PMO told us that they are still reviewing the details of implementing a certification program. The SOAR PMO also said that a comprehensive training plan for financial management personnel for fiscal year 2001 does not exist. The SOAR Steering Committee had determined that there was a need for more District user access to individuals with enhanced SOAR, expertise.
At the same time, the District is in the process of implementing a new program called the "Super Users" program. The goal of the program is to develop a team of "super users," individuals with advanced SOAR skills, to serve as mentors and providers of on-the-job training to users. District officials said they had recently selected eight individuals for this program, and a recruitment effort is underway to identify eight more individuals for the program.
The current system does not have the capability to capture the costs of specific District programs or activities. Project cost accounting is important in determining whether specific programs or activities are achieving their goals within budget. To compensate for the lack of a project cost accounting capability, agencies are capturing and maintaining information outside SOAR manually or by using other software applications. According to District officials, there are no plans to implement a separate module, such as activity-based costing. Comparative and accurate cost information would enable stakeholders to make more informed decisions, which would, in turn, provide better service to the citizens of the District through improved service delivery. Currently, various District activities, such as the cost of trash collections, motor vehicle inspection, clinical care, and street repairs, must be calculated manually, which is inefficient, time-consuming, and prone to error. District officials anticipated that the performance measures featured in the performance budget module would be able to provide comparative and cost information for all levels of programs throughout the District. However, it is unlikely that the District will have a solution for its program cost needs until after a budgeting system is implemented and integrated with SOAR.
In September 1997, the District planned to spend $26 million (plus related costs for personnel and space) to implement SOAR. According to the Deputy CFO, as of March 8, 2001 -- almost 3-1/2 years later -- the actual cost had climbed to about $41 million, an increase of about $15 million.
According to the PMO, one of the reasons for the increased costs was the need to provide knowledge transfer (this refers to agency-specific implementation assistance, enhanced training, and help desk operations) at the major agencies and transition assistance, which were not originally included in the contract. According to another District official, the increase in implementation costs also resulted from the District initially not completely understanding user requirements. Consequently, the District found it necessary to implement additional requirements after the fact. For example, after the SOAR contract was awarded, the University of the District of Columbia (UDC) determined that SOAR could satisfy its requirements for higher education accounting and opted to install SOAR, rather than a separate new system, at a cost of $1 million. Also, according to a District official, the District underestimated the level of support and time required to implement SOAR. Accordingly, the District contracted for additional implementation support. Further, additional District users required access to EIS and thus required the purchase of additional EIS licenses, licenses which cost the District approximately $900,000.
Acquiring an effective information system must begin with a clear definition of the organization's mission and strategic goals. To assure a solid foundation for the District's system, we offered a structured approach in our July 1997 report19 based on three building blocks especially important in the early stages of a project: concept of operations, requirements .definition, and alternatives analysis. A concept of operations -- the panorama of a system's purpose and the environment in which it will function -- is the basis on which specific requirements -- functions the system must be able to perform -- are developed. With a complete set of well-defined requirements based on a clear concept of operations, District leaders could make an accurate analysis of how well available alternatives would meet the needs of the government and its citizens.
In April 1998,20 after the District had contracted for and begun development of its new system, a more detailed study led us again to the conclusion that the District's process, while strong in some areas, was undisciplined and immature. Our conclusion was based on a well-recognized model of software process assessment, the Software Engineering Institute's Software Acquisition Capability Maturity Model (SA-CMM). In our recommendations, we stressed the need for written policy and documentation, the development of a management plan, the assignment of responsibility for areas of planning and development, and requirements development in the key process areas of software acquisition planning, requirements development and management, project management, contract tracking and oversight, evaluation, and acquisition risk management.
Although the processes spelled out in the SA-CMM model and our recommendations are detailed, rigorous, and time-consuming, they are, in the long run, cost-effective and vital elements of success. Unfortunately, in its efforts to meet an overly ambitious time schedule, the District has spent considerably more money than planned to acquire a system that -- 6 years after we began our review and started making recommendations -- now serves as yet another cautionary example of the risks entities run when they choose to short-cut a disciplined approach to the planning, acquisition, and management of a financial management system.
Another key component of successful financial management for the District is conducting a comprehensive assessment of its human capital needs for its financial management functions. In our Executive Guide: Creating Value Through World-class Financial Management,21 we outlined three critical elements for developing first-rate financial management staff teams. These elements were: (1) determining required skills and competencies, (2) measuring the gap between what the organization needs and what it has, and (3) developing strategies and detailed plans to address current or expected future deficiencies. We reported that having staff with appropriate skills is key to achieving financial management improvements, and managing an organization's employees is essential to achieving results. Entities that focus on valuing employees and aligning their policies to support organizational performance goals start with a human capital assessment. The results of such an assessment could help to determine the resources needed to successfully implement financial management improvements. And, as we reported in September 2000,22 performing a self-assessment of human capital needs helps organization leaders understand the strengths and limitations of their human capital information systems. These data can help an organization develop a profile of its human capital. Further, because human capital information can spotlight areas of concern before they develop into crises, gathering these data is an indispensable part of effective risk management. Without a formal assessment of its requirements and needs, and a strategy for addressing them, the District's efforts can become piecemeal, incomplete, and ineffective. The challenges the District already faces in implementing its financial management system could be exacerbated by its lack of a human capital assessment for its financial management functions. By not identifying staff with the requisite skills to implement such a system and by not identifying gaps in needed skills and filling them, the District has reduced its chances for successful implementation.
In reports dating back to 1995, we have reported on the District's financial situation and efforts to improve its financial management, including the implementation of SOAR. For example, in 1995, we recommended that the Mayor clean up existing data in the financial systems and place special emphasis on ensuring that basic accounting policies and procedures are followed and that the Authority study the accounting and financial management information needs of the District.23 In a July 9. 1997, status report,24 we noted that the District had not completed three key elements of its system acquisition: concept of operations, requirements definition, and alternatives analysis. We also noted that the time frames for completing several of these important tasks were unknown and that the District had adopted an overly ambitious schedule.
On April 30, 1998, we reported25 that the District's software acquisition processes, while having some strengths, were not mature when compared to standards established by the Software Engineering Institute. Weaknesses noted in the report included: (1) requirements definition problems; (2) project management and oversight weaknesses; (3) lack of an effective evaluation process; (4) lack of a formal risk management process; and (5) failure to meet some milestones. In that report, we made six recommendations for strengthening the processes that relate to the SOAR project and improving future software acquisition efforts. As discussed earlier, in our December 1999 report on the CAPPS system,26 we noted that by not implementing critical management processes, the District lacked the means to establish realistic time frames for CAPPS, track development along those time frames, and ensure that changes being made to CAPPS were consistent and in line with business requirements. We made six recommendations to the District that focused on the need to implement effective management controls and processes for maintaining, operating, and protecting CAPPS.
Together, those reports established a framework for actions the District needed to take in order to (1) improve its financial management and (2) avoid costly failure when acquiring a new financial management system that would successfully meets its needs. In our report. we indicated that major improvements in the District's financial management and other management information can only be realized if they are part of an overall assessment of processes, people, and equipment.
As of April 3, 2001, the District had implemented 3 of the 16 recommendations we made since 1995, and critical recommendations have yet to be fully addressed. The District had action in process on another 13 recommendations. Table 2 in appendix I provides the implementation status of recommendations made in our reports and testimony on SOAR implementation covering fiscal years 1996 through 2000.
The District continues to face significant challenges in its efforts to put in place a financial management framework that ensures timely and reliable financial data, on the cost of the District's operations. In its efforts to meet an overly ambitious schedule, the District has spent considerably more money than planned to acquire a system that -- 6 years after we began our review and started making recommendations -- now serves as yet another cautionary example of the risks involved in not following a disciplined approach to the planning, acquisition, and implementation of a financial management system.
Almost 4 years after the District's acquisition of its core financial management system, SOAR and related systems are in various stages of implementation and some elements have been put on hold. The current mix of components involves duplication of effort and requires cumbersome manual processing instead of automated interfaces. Staff members who use the system are inadequately trained. In its current state, the system is unable to produce relevant, useful, tamely, and reliable information adequate to the needs of government officials for assessing the costs of programs, measuring program performance, and making well-informed decisions in forming the city's budget and in providing city services.
With a system that is still incomplete more than 2 years after the planned date for citywide implementation, the District has already spent over 50 percent more than originally planned for SOAR implementation. The project continues to experience implementation delays, and the final cost of the complete financial management system cannot yet be determined.
Disciplined acquisition and implementation processes are designed to prevent the types of problems experienced by the District in its financial management systems implementation. The key to a disciplined system development effort is the use of disciplined processes in multiple areas, including requirements management, project planning, project tracking and oversight, quality assurance, configuration management, and risk management. These key areas have been the focus of our recommendations in reports dating back to 1995. The District has not yet completed action on most of these recommendations and has failed to institute the disciplined approach needed to ensure the successful implementation and management of a financial management system.
The District's difficulties reflect the experience of other entities that have attempted to build a financial management system without first laying a solid foundation. Essential to that foundation is the definition of requirements. A system cannot be counted on to fill needs that have not been clearly defined. When those needs are later identified, retrofitting software can cost significantly more than the same work done during original development. The District continues to develop its system without clearly defined user requirements.
Although the District recently received its fourth consecutive unqualified or "clean" audit opinion on its financial statements, the financial information needed by decisionmakers to measure and manage performance requires greater precision and more timely access than that needed to satisfy a financial audit. Furthermore, to continue achieving clean opinions without the support of an efficient financial management system, officials and staff will be forced each year to devote extraordinary effort at the expense of other city government operations. As the city moves toward greater financial independence, the weakness of its financial management system may become increasingly difficult to overcome.
As we recently reported in our Executive Guide,27 to provide meaningful information to decisionmakers, entities must develop systems that support the partnership between finance and operations. Entities must ensure that the systems accurately measure the program costs and that they provide decisionmakers and line managers with timely, accurate financial information on the quality and efficiency of business processes and performance. Entities must also identify their human capital needs by conducting a human capital assessment in order to develop human capital strategies to address current and future risks faced by the entity. Such an assessment is critical to helping entities establish the systems and processes needed to successfully improve financial management and accountability.
District officials need to take time now to assess the current status of the city's financial management system, to identify problems, and to establish a disciplined process to address these problems through the completion of its financial systems implementation. As we discussed in our Executive Guide, financial management improvement needs to be an entitywide priority -- in this case, the District -- overseen by leadership that is in control of the process and accountable for its success. Financial and program managers need to be able to rely on the system for adequate, timely cost and performance information needed to manage costs, measure performance, make program funding decisions, and analyze outsourcing or privatization options. With such information District decisionmakers will have the tools they need to meet the demands of managing the city's finances efficiently and serving its citizens effectively.
Before moving forward on the implementation of the District's financial management system, we recommend that the Mayor, in concert with the Chief Financial Officer, take the following actions:
In commenting on a draft of this report, the Chief Financial Officer of the District agreed with our recommendations and provided additional details on four areas: (1) our prior recommendations, (2) our recommendation about assessing human capital needs, (3) our recommendation regarding the budget process, and (4) implementation of SOAR. With respect to the CFO's comments on SOAR, the results of our work showed that the CFO's characterization of the progress made to date was overly optimistic. The CFO's comments are reprinted in appendix II. A representative from the Mayor's Office also reviewed this draft, along with the CFO's comments, and stated that the Mayor's Office had no further comments.
In regard to implementing our prior recommendations, the CFO stated that the District is taking action as described in a March 12, 2001, letter to us. This letter was in response to our recent request that the District provide us an update on the actions it had taken to address recommendations from our December 1999 report.28 As part of our ongoing work in the District, we will be evaluating these actions to determine whether they satisfactorily address our prior recommendations.
Concerning our recommendation that the District assess its human capital needs, the CFO noted that the District had taken the initial step in conducting a human capital assessment by engaging a professional services firm to help review the District's organizational structure and identify performance measures and best practices. However, as the CFO noted, the professional services firm review provides the groundwork for the first phase of the CFO's financial management performance measures audit. Financial and program managers need to be able to rely on the system for adequate, timely cost and performance information needed to manage costs, measure performance, make program funding decisions, and analyze outsourcing or privatization options.
The CFO also stated that the core SOAR implementation was delivered on schedule and performs as intended. He further noted that the increased costs of the SOAR implementation were directly associated with changes in scope not cost overruns. As we noted in our report, however, the District's performance budget module has been put on hold and the fixed asset module is incomplete. Both of these modules are key components of the SOAR system. Further, as discussed above, the implementation of systems that feed into SOAR-personnel and payroll, procurement, and tax-is incomplete and the systems lack electronic interfaces with SOAR. As we also discussed, many of the cost increases were also the result of additional requirements and the District not completely identifying user requirements up-front.
Finally, in regard to the CFO's comment that not all SOAR users are required to complete all core modules, according to the SOAR PMO, less than 50 percent of the SOAR user community had completed the new core training curriculum.
We are sending copies of this report to Senator Mike DeWine, Senator George Voinovich, Senator Mary Landrieu, Senator Richard J. Durbin, Representative Chaka Fattah, Representative Constance A. Morella, and Representative Eleanor Holmes Norton in their capacities as Chairmen or Ranking Minority Members of Senate and House Subcommittees. We axe also sending copies of this report to Anthony A. Williams, Mayor of the District of Columbia; Natwar Gandhi, Chief Financial Officer of the District of Columbia; Charles Maddox, Inspector General of the District of Columbia; Deborah K. Nichols, District of Columbia Auditor; Suzanne Peck, Chief Technology Officer; and Alice Rivlin, Chairman of the District of Columbia Financial Responsibility and Management Assistance Authority. Copies will be made available to others upon request.
Please contact me at (202) 512-2600 or Jeanette Franzel at (202) 512-9406 or by e-mail at franzelj@gao.gov if you have any questions about this report. Other major contributors to this report were Richard Cambosos, Linda Elmore, Maxine Hattery, Jeffrey Isaacs, John C. Martin, Meg Mills, and Norma Samuel.
Sincerely yours,
Jeffrey C. Steinhoff
Managing Director, Financial Management and Assurance
| Date and report number | Recommendation | Status as reported by District officials |
| To the District of Columbia Financial Responsibility and Management Assistance Authority (Authority) | ||
| June 21, 1995 GAO/T-AIMD-95-176 |
1. Study the accounting and financial management information needs of the District of Columbia government. | Completed. The Authority has (1) performed site visits and benchmarking analysis of accounting and financial management information systems similar to that used in the District; (2) hired a consultant with extensive business process reengineering and systems implementation experience to analyze the District's financial management information systems implementation effort; and (3) created a System of Accounting and Reporting (SOAR) Steering Committee, headed by the Chair of the Authority, which includes the Mayor, CFO, Chief Technology Officer, Inspector General, and a DC Council member. |
| June 21, 1995 GAO/T-AIMD-95-176 |
2. The Authority should ensure that any improvements to management information be consistent with both the financial plan and the performance plan which are required by the Authority Act, Fiscal Year 1995 Appropriation Act, and Federal Payment Reauthorization Act of 1994 | Action in process. According to the Authority, it is (1) assessing the functionality of the SOAR Performance Budgeting module; and (2) including performance budgeting as an agenda item for the SOAR Steering Committee. |
| April 30, 1998 GAO/AIMD-98-88 |
Direct the District's Chief Financial Officer to (1) take the following actions for the six key process areas we reviewed to ensure that the current financial management system acquisition and implementation is satisfactorily completed and (2) apply these actions to any future software acquisitions. | See items 3 through 8 below. |
| April 30, 1998 GAO/AIMD-98-88 |
3. Software Acquisition Planning: (1) document decisions and update planning documents to ensure that large acquisitions such as FMS can be effectively managed; (2) designate responsibility for software acquisition planning activities; (3) determine required resources for acquisition planning; (4) ensure that measurements of software acquisition activities are taken; (5) ensure that the software acquisition planning documentation is updated as well as make program changes regarding outsourcing of the data center and upgrading the current system versus buying off-the-shelf; (6) ensure that the software acquisition planning documentation addresses life-cycle support of the software; and (7) develop a written policy for software acquisition planning. | Action in process. The Authority is working with the following: (1) SOAR program management office and the District's Chief Technology Officer to develop performance metrics and reports that enhance accountability and project management control; and (2) the District's CFO to determine resources required for acquisition planning. In addition, the Authority worked with the District's data center manager and information technology consultant in structuring an alternatives and cost-benefit analysis of out-sourcing the data center and upgrading versus replacing the current system. |
| April 30, 1998 GAO/AIMD-98-88 |
4. Requirements Development and Management: (1) develop an organizational policy for establishing and managing software-related requirements; (2) clearly assign responsibility for requirements development and management; (3) document other resource requirements or resources expended for requirements development activities; (4) develop the capability to trace between contractual requirements and the contractor's work products; and (5) develop measurements to determine the status of the requirements development and management activities. | Action in process. The Authority is (1) emphasizing the importance of implementing and enforcing clear policies and lines of accountability through the SOAR Steering Committee; (2) requiring that the District provide documentation and justification for resources requested or expended; and (3) emphasizing the importance of explicitly linking contractor payments to specific deliverables through the use of work breakdown structures. |
| April 30, 1998 GAO/AIMD-98-88 |
5. Project Management: (1) develop a written policy for the execution of the software project; (2) authorize the project manager to independently alter either the performance, cost, or schedule; and (3) require that measurements be taken to determine the status of project management activities. | Action in process. The Authority has emphasized developing quantitative measures of project performance. Examples include emphasis on the internal transactions files and timeliness and accuracy of payroll data. |
| April 30, 1998 GAO/AIMD-98-88 |
6. Contract Tracking and Oversight: (1) develop written policy for contract tracking and oversight activities for the financial management system project; (2) support the project team with contracting specialists; (3) require that the project team review the contractor's planning documents (for example, the project management plan, software risk management plan, software engineering plan, configuration management plan); (4) assign someone responsibility for maintaining the integrity of the contract; and (5) take measurements to determine the status of contract tracking and oversight activities. | Action in process. The Authority has emphasized to the SOAR PMO the importance of developing clear project deliverables and matching these to costs through the development of work breakdown structures. |
| April 30, 1998 GAO/AIMD-98-88 |
7. Evaluation: (1) develop written policy for managing the evaluation of acquired software products and services; (2) develop a documented evaluation plan; (3) develop evaluation requirements in conjunction with system requirements; (4) assess the contractor's performance for compliance with evaluation requirements; (5) develop measurements to determine the status of evaluation activities; and (6) ensure that the Authority and project manager review the status of evaluation activities. | Action in process. Utilizing benchmarking performance management and best practices, the District is establishing a program to ensure adherence to best technology practices for all future critical systems software acquisitions. Policies and plans are being developed within the framework of a long-term technology blueprint. |
| April 30, 1998 GAO/AIMD-98-88 |
8. Acquisition Rick Management: (1) develop written policy for software acquisition risk management; (2) designate a group to be responsible for coordinating software acquisition risk management activities; (3) define resource requirements for acquisition risk management; (4) ensure that individuals designated to perform software acquisition risk management have adequate experience and training; (5) integrate software acquisition risk management activities; (6) develop a software acquisition risk management plan in accordance with a defined software acquisition process; (7) develop a documented acquisition risk management plan and conduct risk management as an integral part of the solicitation, project performance management, and contract performance management processes; (8) track and control software acquisition risk handling actions until the risks are mitigated; and (9) ensure that risk management activities are reviewed by the Authority and the project manager. | Action in process. The Authority has: (1) created the SOAR Steering Committee, responsible for coordinating a variety of activities including software acquisition risk management; (2) emphasized the importance of ensuring that information technology employees within the District are properly screened, certified, and qualified; and (3) hired a consultant to review and assess overall SOAR acquisition and implementation performance, including risk management. |
| To the Mayor | ||
| June 21, 1995 GAO/T-AIMD-95-176 |
9. Clean up existing data in the financial systems and place special emphasis on ensuring that basic accounting principles and procedures are followed. | Completed. The District of cleaned up its financial data and has continued to place an emphasis on accounting principles and policies. The OCFO obtained contractual assistance to work with the District agencies, identify required adjustments to the SOAR system balances, and ensure that these adjustments were properly recorded and reflected in SOAR. In addition, the District reestablished the Committee for Financial Excellence charged to build an infrastructure that supports a strong financial base. |
| June 21, 1995 GAO/T-AIMD-95-176 |
10. Establish a process of accountability for implementation of management initiatives. | Action completed. According to the then-Interim Chief Financial Officer, all management reform and the reporting of initiatives is done by the Chief Management Officer. This monthly reporting process captures information by agency, including funding; expense; cost saving; and project activity, including phase, duration, start date, and completion date. |
| To the Chief Financial Officera | ||
| December 7, 1999 GAO/AIMD-00-19 |
Direct the CAPPS program office to do the following | See items 11 through 15 below |
| 11. Develop and maintain a risk management plan. | According to the Director, Enterprise Office, action is in process to address this recommendation. | |
| 12. Develop a requirements baseline and obtain agreement between the program office and the system users. | According to the Director, Enterprise Office, action is in process to address this recommendation. | |
| 13. Implement a configuration control process to control and document further modifications being made to CAPPS. The process should (1) clearly define and assess the effects of modifications on future product upgrades before the modification is approved, (2) clearly document the software products that are placed under configuration management, and (3) maintain the integrity and traceability of the configuration throughout the system life cycle. | According to the Director, Enterprise Office, action is in process to address this recommendation. | |
| 14. Develop and implement a life-cycle support plan, assign responsibility for life-cycle-maintenance, and develop an estimate of maintenance and operation costs for CAPPS. | According to the Director, Enterprise Office, action is in process to address this recommendation. | |
| 15. Develop and implement a security plan based on a realistic risk assessment of CAPPS security vulnerabilities. | According to the Director, Enterprise Office, action is in process to address this recommendation. | |
| 16. Develop a centralized file for contract task orders and other contract documentation related to CAPPS. | According to the Director, Enterprise Office, action is in process to address this recommendation. | |
a. As discussed in the report
body, CAPPS, while not a component of SOAR, is a critical interface to the
system.
Source: District of Columbia OCFO and the Authority, September and October
2000, and January and March 2001.
Note: GAO Comments supplementing those in the report text appear at the end of this appendix.
April 3, 2001
Jeanette M. Franzel
Acting Director
Financial Management & Assurance
U.S. General Accounting Office
441 G Street, NW., 5th Floor
Washington, DC 20548
SUBJECT: Comments to District of Columbia: Weaknesses in Financial Management Systems Implementation
Dear Ms. Franzel:
I am in receipt of your draft report entitled District of Columbia: Weaknesses in Financial Management Systems Implementation. As requested, I am providing comments on the General Accounting Office's (GAO) recommendations made in the respective report. My comments are as follows:
The GAO recommended that the Mayor, in concert with the Chief Financial Officer assess the status of current financial management operations, including financial management policies and procedures and systems acquisition and development policy and procedures, and whether the current systems have the capability of meeting the District's financial management needs.
The Chief Financial Officer (CFO) concurs with the recommendation and will direct the Deputy Chief Financial Officer for Financial Operations and Systems to conduct and document the results of this assessment, in concert with the Acting Deputy Chief Information Officer. This assessment will be used to plan for and implement improvements in the overall District financial management system as defined by the GAO. [See comment 1]
The GAO recommended that the Mayor, in concert with the CFO, develop an overall concept of operations which clearly articulates overall quantitative and qualitative system characteristics to the user, developer, and other organizational elements and which facilitates understanding of the user organizations, missions, and organizational objectives from an integrated systems point of view.
The CFO concurs with this recommendation. The CFO's Enterprise Office will take actions to address the recommendation during this fiscal year (2001). [See comment 1]
The GAO recommended that the Mayor, in concert with the CFO, develop an action plan based on that assessment and the overall concept of operations that addresses any identified weaknesses, including the necessary systems and procedural changes, and that specifies a disciplined process with milestones and clear accountability.
The CFO concurs with this recommendation. The CFO's Enterprise Office, in concert with the Acting Deputy Chief Information Officer, will take the actions to address this recommendation upon completion of the assessment and the actions to address the recommendation above regarding the development of an overall concept of operations for an integrated financial management system. [See comment 1]
The GAO recommended that the Mayor, in concert with the CFO, incorporate our prior, open recommendations in the action plan to address the key areas of requirements development and management, project planning, project tracking and oversight, quality assurance, and training as they apply to components of the system that are not yet fully implemented. This would include the fixed asset module, performance budgeting, personnel and payroll, procurement, integrated tag, and all interfaces.
The CFO concurs with this recommendation. The Director of the CFO's Enterprise Office is taking action to address the prior open recommendations as indicated in a separate letter to the GAO, dated March 12, 2001. [See comment 1]
The GAO recommended that the Mayor, in concert with the CFO, determine the competencies required at leadership, management, and functional levels for financial and nonfinancial managers, and develop appropriate training. Strictly enforce the implementation of the training curriculum and mandate attendance at user training sessions.
The CFO agrees with this recommendation, and as part of implementing the financial management performance measures program discussed below, the CFO will direct the taskforce to review the competencies and training curriculum for the financial management staff. [See comment 1]
The GAO recommended that the Mayor in concert with the CFO should conduct an assessment of the District's human capital needs for financial management in order to strategically develop its financial management team to successfully address the current weaknesses in financial management systems, as well as to support the District's overall mission, goals, and objectives.
The CFO agrees with this recommendation. In fact, the CFO began an assessment of the District's human capital needs for financial management in November of 2000. The CFO obtained professional and technical services to review the organizational structure and identify performance measures and "best practices" through the use of benchmarking processes with selected local governments and private sector organizations. The focus of the study was on pertinent departments within each Office of the Agency CFOs to include budget, general accounting, accounts payable, payroll and internal audits. Recommendations from this review included establishing performance measures for each financial staff position, as well as each typical agency financial function. This review provided the groundwork for the first phase of the CFO's financial management performance measures program, and improved financial management leadership and support. [See comment 1]
The CFO has formed a taskforce, which includes members from the executive branch, to implement the recommendations provided from this review. The CFO will direct this taskforce to ensure that all aspects of the GAO "Human Capital: Self-Assessment Checklist" are addressed.
The GAO recommended that the Mayor in concert with the CFO complete the reengineering of the budget process in conjunction with the implementation of a budget and project costing system.
The CFO agrees with this recommendation, and will continue the reengineering of the budget formulation process and integrate program performance budget reporting into budget preparation. However, the CFO takes exception with the GAO statements that the fiscal year 2002 budget formulation process did not have the benefit of an "implemented financial system gathering and formulating its budget data" nor will it have "adequate program-level cost and budget results data for fiscal year 2001." The fiscal year 2002 budget process integrated data from several financial systems: Comprehensive Automated Personnel and Payroll System -- CAPPS and Unified Personnel and Payroll System -- UPPS (payroll data), and System of Accounting and Reporting -- SOAR (general ledger and financial reporting). In addition, the Office of Budget and Planning requested, via the fiscal year 2002 Budget Manual, and obtained program-level (responsibility center) cost and budget results from District agencies.
In conclusion, it is important to note the following regarding the SOAR system:
In addition, while we have not completely implemented all recommendations, we have and continue to take action to address them.
If you have further questions or concerns, please contact me at (202) 727-2476, or your staff may contact Wilma G. Matthias, Director, Internal Audit and Internal Security, at (202) 442-6433.
Sincerely,
Natwar M. Gandhi
Chief Financial Officer
cc: Wilma G. Matthias, Director
Internal Audit and Internal Security
Anthony Pompa, Deputy CFO
Office of Financial Operations and Systems
William Simpson
Acting Chief Information Officer
Joseph Sanchez, Director
Enterprise Office
The following are GAO's comments on the District of Columbia's April 3, 2001 letter.
1. See the "Agency Comments and Our Evaluation" section of this report.
2. The report has been changed to show 9 instead of 10 training modules. As stated in our report, according to the SOAR PMO, less than 50 percent of the SOAR user community had completed the new core training curriculum.
1. The financial management system includes SOAR as well as other feeder systems requiring interfaces with SOAR.
2. District of Columbia. Status of Efforts to Develop a New Financial Management System (GAO/AIMD-97-101R, July 9, 1997).
3. District of Columbia Software Acquisition Process for a New Financial Management System (GAO/AIMD-98-88, April 30, 1998).
4. District of Columbia: Improved Financial Information and Controls Are Essential to Address the Financial Crisis (GAO/T-AIMD-95-176, June 21, 1995).
5. See GAO/T-AIMD-95-176, June 21, 1995.
6. See GAO/AIMD-98-88, April 30, 1998.
7. Barry W. Boehm and Philip N. Papaccio, Understanding and Controlling Software Costs, IEEE Transactions on Software Engineering, Volume 14, Number 10, October; Charting the Seas of Information Technology, The Standish Group, 1994; Capers Jones, Assessment and Control of Software Risks, (Yourdon Press), 1994; and Dean Letfingwell, Calculating the Return on Investment from More Effective Requirements Management, American Programmer, 1997.
8. Requirements are the blueprint that system developers and program managers use to design and develop a system. It is critical that requirements be carefully defined and flow from the concept of operations (how the organization's day-to-day operations are or will be carried out to meet mission needs). Ill-defined or incomplete requirements have been identified by many system developers and program managers as a root cause of system failure. Without adequately defined and organizationally approved requirements, a system will need extensive and costly changes before it can become fully operational.
9. See GAO/AIMD-97-101R, July 9, 1997.
10. District of Columbia Inspector General Independence as Compared to Federal Agencies and Acquisition of a New Financial Management System (GAO/AIMD-98-27R, October 21, 1997).
11. District of Columbia. Weaknesses in Personnel Records and Public Schools' Management Information and Controls (GAO/T-AIMD-95-170, June 14, 1995).
12. District of Columbia. The District Has Not Adequately Planned for and Managed Its New Personnel and Payroll System (GAO/AIMD-00-19, December 17, 1999).
13. Audit of Procurement Activities Office of Contracting and Procurement, Office of the Inspector General, Government of the District of Columbia, OIG-20-99P0, July 27, 2000.
14. PRISM is an automated commercial off-the-shelf procurement system that tracks and maintains small purchases and contract records. PRISM has three modules: (1) OCP Express (small purchases), (2) planning, and (3) contracts. PRISM was intended to allow District agencies the ability to interface and automate all procurement activities from the requisition to the receipt of goods or services.
15. Information Security. Weak Controls Place DC High way Trust Fund and Other Data at Risk (GAO-01-155, January 31, 2001).
16. The District of Columbia Government, Final Report: Organizational Review of the Office of Budget and Planning (Government Finance Officers Association, Report 2000-52, November 2, 2000).
17. District of Columbia: New Financial Management System (GAO/AIMD-99-217R, June 18, 1999).
18. See GAO/AIMD-99-217R, June 18, 1998.
19. See GAO/AIMD-97-101R, July 9, 1997.
20. See GAO/AIMD-98-88, April 30, 1998.
21. Executive Guide: Creating Value Through World-class Financial Management (GAO/AIMD-00-134, April 2000).
22. Human Capital: A Self-Assessment Checklist of Agency Leaders (GAO/OCG-00-14G, September 2000 Version 1).
23. See GAO/T-AIMD-95-176, June 21, 1995.
24. See GAO/AIMD-97-101R, July 9, 1997.
25. See GAO/AIMD-98-88, April 30, 1998.
26. See GAO/AIMD-00-19, December 17, 1999.
27. See GAO//AIMD-00-134, April 2000.
28. See GAO/AIMD-00-19, December 17, 1999.
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