HHS tests unified financial system

The Department of Health and Human Services has completed the first phase of testing its Unified Financial Management System, which agency officials say is the largest civilian implementation of a combined financial system ever undertaken.

The unified system is designed to streamline the seven disparate systems among HHS' 13 agencies. The test involved writing transactions and ensuring that they work.

The system was tested at the Centers for Disease Control and Prevention in Atlanta, said John Gentile, program deputy director.

The pilot project, which ran through August, tested six modules, including general ledger, accounts payable, accounts receivable, cost management, budget execution and funding. The first phase tested each module separately, and a second pilot project will test how they interact with one another. Officials expect to run the second test at CDC in March, Gentile said.

"We are seeing how the interfaces are working with real data and different transactions," Gentile said, speaking last month at HHS' information technology opportunity fair.

Officials began developing the department's new financial management system in fiscal 2001. They chose Oracle Corp.'s Federal Financials as the core system and are configuring it to meet the department's requirements, Gentile said.

Following the initial test phase, officials will examine how the modules worked and if they need to make changes or additions.

"We will have looked at all the gaps," Gentile said. "Where we have gaps, we will come up with solutions."

HHS officials will be reviewing and approving solutions and holding mini-pilots to further test the module processing, Gentile said. They will also focus on the next implementation site, the Food and Drug Administration, he said.

The unified system includes three separate tracks for development:

* The global track, including all global requirements for the 13 components.

* The Centers for Medicare and Medicaid Services track, which is tailored to the component's unique needs and requirements.

* The National Institutes of Health track, which started before the department's initiative and will eventually be integrated into the global track.

Officials expect the new system to be fully operational at CDC in October 2004, and they hope to have the system implemented and running at the entire department by 2007.

Because of the overall size of the system and the complexity of integrating so many agencies into a single financial management system, the Office of Management and Budget is closely watching the project, Gentile said.

HHS officials are still finalizing the cost estimates for the entire project, he added.

The largest challenge to developing the financial system is the parallel development of e-government initiatives, Gentile said. As the initiatives have emerged, department officials have had to change their timeline and requirements to make the system compatible with the initiatives. For example, for the Grants.gov initiative, the department is merging seven or eight grant systems into two, Gentile said.

"We are constantly having to focus on how they will impact the tracks we go down," he said. "And that's no small feat."

Karen Alderman, executive director of the Joint Financial Management Improvement Program, said a key ingredient for successful implementation is strong change in management.

"New systems require changes in the way business is done," she said. "That's a big training and business process effort."

Support from top-level managers within the department is crucial for successful implementation, particularly in diverse organizations such as HHS, said Morgan Kinghorn, a partner with IBM Corp.'s Business Consulting Services.

"You've got to have top-level support," he said. "Clearly at HHS, there is that support. It doesn't take a lot, but it does take the top of the organization talking about the project and why it's important."

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2007: HHS' financial odyssey

Here's a brief timeline of the Department of Health and Human Services' Unified Financial Management System:

2002: Implementation plan completed.

August 2003: First pilot phase completed, at the Centers for Disease Control and Prevention, testing individual financial modules.

March 2004: Second pilot phase to be completed at CDC, testing the modules' interoperability.

October 2004: System to be deployed at CDC.

2005: System to be deployed at the Food and Drug Administration.

2007: System to be deployed and fully operational departmentwide.

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