Congress questions cancelled shared service effort

A House panel wonders if DHS' third try at financial shared services yielded anything worthwhile.

shared services concept

The agreement between the Department of Homeland Security and the Department of the Interior’s financial management service provider was abandoned earlier this year because of missed deadlines and cost overruns, agency officials told a congressional panel, and could mark a turning point in how shared services are approached.

“There was an underestimation on both sides,” of how the Interior Business Center could provide a complex set of shared financial services for three of DHS’ component agencies, IBC Director Michele Singer told the House Homeland Security Committee's Oversight and Management Efficiency Subcommittee at a Sept. 26 hearing.

The effort was DHS’ third in the last decade to leverage shared financial management services for its component agencies to cut costs and even out financial services across the sprawling agency. The programs, said Subcommittee Chairman Scott Perry (R-Pa.), have ultimately cost taxpayers more than $170 million over the years, including $50 million on the latest effort. Perry said the total amount was “astounding.”

“I share the committee’s frustration,” DHS Deputy Under Secretary for Management Chip Fulghum told the legislators during the hearing.

Earlier this year DHS “ended the relationship with IBC” because of cost overruns, IBC staffing issues and the provider's lack of understanding of the complexities of providing services to large federated agencies, Fulghum said. DHS’ Trio program covered three components -- the Domestic Nuclear Detection Office (DNDO), the Transportation Security Administration and the Coast Guard -- that would ultimately use the same shared services platform.

Singer, who started at the IBC after the DHS effort had begun, told the subcommittee she “was disappointed” in her predecessors’ ability to help prevent delays and cost overruns for the program.

However, despite the most recent failure, Fulghum, Singer and Elizabeth Angerman, executive director of the General Services Administration’s Unified Shared Services Management Office, told the subcommittee that the DHS/IBC experience had yielded positive things for federal shared services.

For DHS, Fulghum said the effort had established a working foundation for DNDO to shift shared services to a private cloud platform, which could be expanded to serve TSA by the beginning of fiscal 2020 and the Coast Guard by the beginning of fiscal 2021.  By this October, he said, the system DHS and DNDO brought over from IBC would serve 80 percent of DNDO’s integrated financial management services needs.

Singer said the lessons learned from the project included understanding the importance finding a baseline of requirements for large federated agencies; having program planning support; and recognizing that customer agencies must evaluate and have the power to eliminate disparate operations that aren’t legally mandated.

“Management has to be able to say ‘no’ to individualized approaches,” she said.

Angerman said the federal government should “take a step back” in light of the DHS/IBC effort and look at how its wants to move forward with shared services holistically.

Six months into the new administration could offer a chance to do that, Fulghum suggested.

“There was a persistence to head to the federal shared services model under the previous administration,” he said. “I’ve seen an increase in adaptability to the model we’re going to under this administration.”

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