D.C. tries to SOAR

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Measuring success

You allocate millions for a state-of-the-art financial management system.

That's good.

And despite the system's complexity, you manage to design and install it in less than a year. That's good, too.

But once it's up and running, it's not the dream fix you had in mind.

Why? In the case of Washington, D.C.'s new System of Accounting and Reporting

(SOAR), the glitch was obvious — after the fact.

They didn't properly gauge the amount of time and resources needed to

effectively train people how to use it.

SOAR was born out of an initiative that D.C. Mayor Anthony Williams

proposed in 1996, when he was the city's chief financial officer. He wanted

to find out what could be done about the city's outdated financial management

system.

At the time, there were increasing concerns that the system no longer

supported the district's basic financial business requirements. Essentially,

D.C.'s system was in such disarray that Congress, the national media and

the public had taken notice. Because of system snafus, contractors and other

people working for the district weren't getting paid. To make matters worse,

the system couldn't provide timely or reliable financial reports, and it

wasn't Year 2000 compliant.

The dire situation prompted the district to embark on one of the most ambitious

public financial management projects ever: developing and implementing a

system that would be accessed by more than 2,000 people with widely varied

needs and demands — and doing it all within one year.

The pressure of the daunting job may have led to the creation of its Achilles

heel.

"We were going a mile a minute at the beginning and no one had time

to breathe,'' said Karen Damrow, a principal with James Martin and Co. Government

Consulting, one of the two main contractors for SOAR. "I mean, we set up

six pilots in six months, and after one year, the system was implemented

in total.

"But D.C. has a very unique and large work force, and [training] has been

a problem for them for a long time. We anticipated it and knew it was a

risk to the overall program we're backing, but it's still a problem."

As part of its original contract, KPMG LLC agreed to provide training

for D.C. government employees, training more than 2,000 employees in less

than 18 months.

The GAO did a report on this training and found it satisfactory, said

Donald Richardson, managing director of KPMG's state and local government

practice, the part of the company tagged to implement the system. "It's

an enormous task to switch over a financial reporting system in 12 months.

[This switch was] one of the fastest ever required for a similar statewide

or countywide financial management system."

Unfortunately, that initial training quickly grew obsolete as the system

was upgraded and expanded. Continued training is necessary as the different

departments and agencies ramp up on SOAR and use it for more applications,

but that has proven to be easier said than done despite the efforts of James

Martin and some government managers.

"We created agency liaisons so that every agency had a program management

liaison from James Martin," Damrow said. "But there are still responsibilities

that the user community needs to fill. For example, getting people to actually

go for the training has been a big problem and still is a problem. We've

worked with the liaisons, agency directors and the CFO's office to help

solve the problem."

Terry Carnahan, D.C.'s project director for SOAR and the chief financial

officer in the office of the chief technology officer, echoed Damrow's sentiments.

"Under ideal circumstances, we would have the contractors do training

over a longer period of time with the agencies to help them learn the system,"

Carnahan said. "There's a real benefit in having them there upfront, helping

the agency personnel to learn how to manage the system."

Further complicating training is the fact that Washington, D.C., is unique

in that it incorporates federal, state, county and local government practices

throughout its more than 100 agencies and departments.

Different agencies use SOAR for different purposes and often operate

under unique governmental guidelines. So the fact that the system was designed

and implemented in a year to deal with all of that complexity, and included

every city agency, is nothing short of miraculous, Carnahan said.

"The complexity of the operations was another one of the major issues with

city, state and county functions, and every kind of government agency. The

city does its budgeting and funding controls the same way the federal government

does it," Carnahan said. "SOAR does all the different aspects in one system,

and there's no place else in the world you will find that. Both contractors

really rolled up their sleeves and worked with us — otherwise, there's no

way we could have done it in the time period we had."

KPMG's Richardson said the speed with which the system had to be completed

has changed some long-standing business habits, which has hindered training

and expansion.

"Changing the district's business habits of 20 years is challenging, even

though [SOAR] has been fully implemented by contract standards and in-depth

system training has been provided," Richardson said. "The district's contract

called for redesigning and standardizing the business processes and procedures

throughout the [government]."

SOAR involved putting in place a suite of commercial off-the-shelf financial

applications across myriad city agencies, as well as creating the Executive

Information System, a client/server-based data warehouse based on information

extracted from the mainframe.

The EIS is still being developed and expanded, Carnahan said. "It gives

the program managers the ability to find financial data on their systems,

including the status of programs and operations that have a financial perspective.

But there's still a lot of work to be done," he said.

Beginning in late 1997, D.C.'s more than 100 departments and agencies

were grouped into 40 implementation agencies, which were then grouped into

five subsections for a phased approach. Pilot operations went live with

core accounting capabilities in February 1998 at the Metropolitan Police

Department and the District of Columbia Public Schools, but the 40 target

agencies would have to wait until later in the year to begin using the system.

The core SOAR system successfully went into production Oct. 1, 1998,

on time and within budget, at a cost of $29 million.

***

Measuring success

Despite the training-related problems, SOAR has achieved most of its

goals. The system provides basic accounting capabilities to every Washington, D.C.,

agency and generates reports on projects for program managers, which helps

them measure the projects' success.

The next milestone for SOAR is an annual audit begun last August. The district's

Consolidated Annual Financial Report will be released when the audit is

done, and this is the first time data from SOAR will be used to generate

the report. Fiscal 1999 data will be used, which represents information

from SOAR's first year in operation. It is hoped that this will provide

a clear picture of status of the new system.

However, the district's Office of the Chief Financial Officer issued

a statement in late January that the CAFR, which is typically released within

four months of the close of the fiscal year, would be delayed until late

April or early May because of delays associated with SOAR. Some formatting

problems were blamed for the delay, but no financial impact is associated

with the report's late release, according to the statement.

Once the audit is done and the CAFR is released, the ultimate goal for

SOAR and the district is to move to a performance-based budget, Carnahan

said.

By definition, a performance-based organization's goals are to increase

customer service while reducing costs, and agencies are given more management

and procurement flexibility to achieve those goals. Incorporating performance

measures into agency projects and creating a performance-based budget would

give the district more financial and procurement flexibility, while maintaining

customer service and costs.

"There's a lot out there to work with, but still a tremendous body of

work to do yet," Carnahan said.

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