Financial systems on the fast, and costly, track

At least four departments are plunging ahead with plans to overhaul financial systems so they are compliant with the most recent regulations, even though project leaders have no assurance of adequate funding.

Officials of the Environmental Protection Agency, Interior and Justice departments, and NASA plan to spend a total of more than $120 million this year and next, and more than $500 million between now and 2007, when they hope to complete the new systems.

“When the ’03 budget surfaces, we’ll see exactly where we stand,” said Mark Greenstein, the director of the Justice United Financial Management System Project Office. He spoke this morning to a group of more than 300 vendors at a meeting of the Bethesda, Md., chapter of the Armed Forces Communications and Electronics Association.

Greenstein said Justice, which has retained Booz Allen Hamilton of McLean, Va., for management support, would roll out a new financial management system first at the FBI by October 2004. Under what he called an aggressive schedule, all Justice agencies would deploy the system by October 2007.

A request for quotes for commercial software packages will go out Feb. 14, Greenstein said, and an award will be made by the end of May via a task order against a General Services Administration IT schedule contract. He estimated Justice’s 2003 costs for the overhaul at $20 million, and predicted the project would cost $200 million through 2007.

Of the four panelists, only NASA’s Michael Mann, director of Integrated Financial Management Programs, said he is flush with money. NASA is the farthest along of the four agencies represented.

“Every budget cycle, I get money thrown at me,” Mann said. He called the overhaul of NASA’s financial systems “the highest priority project in the agency.” In part because, he said, the project has never missed a deadline, and in part because his program has enough money, Mann said, “I go to sleep every night thinking, ‘acceleration.’”

NASA has already spent $180 million developing its core financial system, and will continue to spend roughly $80 million this year extending the system from the two centers where is already deployed to the remaining eight centers by June, Mann said. The system uses software from SAP America Inc. of Newtown Square, Pa.

Debra Sonderman, director of Interior’s Office of Acquisition and Property Management, said the department would be hiring a systems integrator this spring that would in turn help the department choose commercial software. She said her office was hoping for $14 million in modernization funds in fiscal 2004 year and expected the overhaul to cost a total of $110 million over five years.

Terry Ouverson, acting director for systems planning and integration, said EPA would use a combination of commercial software and updates of legacy custom applications to bring its financial systems up to date. He expects to spend $9 million in the current fiscal year, and between $65 million and $70 million by 2007.

The Bush administration will release its fiscal 2004 budget proposals on Monday.

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