oversight

Project Management

Published by the Farm Credit Administration, Office of Inspector General on 2004-09-09.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

Office of
Inspector General


                    Project Management 


                                        04-02 





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                                 September 9, 2004
Farm Credit Administration	                             Office of the Inspector General
                                                        Farm Credit Administration
                                                        1501 Farm Credit Drive
                                                        McLean, Virginia 22102-5090




September 9, 2004

The Honorable Nancy C. Pellett
Chairman of the Board and
 Chief Executive Officer
Farm Credit Administration
1501 Farm Credit Drive
McLean, Virginia 22102-5090

Dear Mrs. Pellett:

The Office of the Inspector General completed an inspection of Project Management.
The objective of this inspection was to compare FCA’s project management for the
implementation of financial systems (Momentum Financial Management System and
Travel Manager) to best practices. We selected these projects for inspection because
the financial management system is critical to FCA’s operations and the systems
represent two of the agency’s largest technology investments. The inspection followed
the President’s Council on Integrity and Efficiency Quality Standards for Inspections.
We conducted fieldwork during July and August.

We found that many important elements of sound project management were missing in
the projects which resulted in delayed implementations. We conclude these important
projects need to be reevaluated and more closely monitored. We also found FCA is not
fully prepared to comply with Federal Travel Regulations regarding E-Travel. The
attached report provides 5 recommendations which can serve to improve the
management of these projects. Further, the lessons learned can be applied to the
FCA’s future large scale projects. The Audit Liaison responded to the draft report (see
Appendix 3) indicating that the Chief Information Officer is convening an evaluation team
to provide an appropriate and cost effective approach for the agency on the issues
raised. We view this as a positive first step towards addressing the recommendations.

I would be pleased to meet with you and discuss the report at your convenience.

Respectfully,



Stephen G. Smith
Inspector General
                                                                     FCA OFFICE OF INSPECTOR GENERAL

                                                                        PROJECT MANAGEMENT 04-02





                                                               Table of Contents

BACKGROUND.......................................................................................................................................................... 1

   PROJECT MANAGEMENT........................................................................................................... 1 

   HISTORY OF FINANCIAL MANAGEMENT AT FCA ......................................................................... 2 

   HISTORY OF TRAVEL MANAGEMENT AT FCA ............................................................................. 3 

OBJECTIVE AND SCOPE......................................................................................................................................... 3


FINDINGS AND RECOMMENDATIONS.................................................................................................................. 4

   SUMMARY................................................................................................................................ 4

   SCOPE AND TIME MANAGEMENT ............................................................................................... 4 

   COST MANAGEMENT ................................................................................................................ 6 

   QUALITY MANAGEMENT ............................................................................................................ 7 

   HUMAN RESOURCES MANAGEMENT.......................................................................................... 8 

   COMMUNICATIONS MANAGEMENT ............................................................................................. 8 

   RISK MANAGEMENT ................................................................................................................. 9 

   PROCUREMENT MANAGEMENT ................................................................................................. 9 

   PROJECT INTEGRATION MANAGEMENT.................................................................................... 10 

   OTHER ISSUES ....................................................................................................................... 11 

APPENDIX 1—PROJECT MANAGEMENT BEST PRACTICES ANALYSIS.................................................... 12


APPENDIX 2—TRAVEL MANAGER SURVEY RESULTS.................................................................................. 14


APPENDIX 3—MANAGEMENT RESPONSE ....................................................................................................... 16

                                          FCA OFFICE OF INSPECTOR GENERAL

                                             PROJECT MANAGEMENT 04-02





BACKGROUND

       The Farm Credit Administration (FCA or Agency) is an independent Federal financial regulatory
       agency. As part of the executive branch of the U.S. Government, FCA has regulatory,
       examination, and supervisory responsibilities for the Farm Credit System (System) banks,
       associations, and related entities. Initially created by the Executive Order of the President in 1933,
       FCA now derives its powers from the Farm Credit Act of 1971, as amended (Act). FCA employs
       fewer than 300 people, with its mission to ensure a safe, sound, and dependable source of credit
       and related services for agriculture and rural America.

       The Office of the Inspector General (OIG) is an independent office within the FCA. The OIG is
       responsible for planning, conducting, and overseeing audits, inspections, investigations, and
       reviews of the Agency’s programs and operations. Findings and recommendations are made as a
       result of these reviews with the goal of improving the overall efficiency of the Agency.

       The OCFO is the main office responsible for the project management of the financial systems.
       OCFO provides financial management services to the FCA in the areas of accounting, budgeting,
       employee and vendor payments, cash management and investments, management reporting and
       external reporting to oversight agencies, Congress and other customers as appropriate.

Project Management
       Project management is the application of knowledge, skills, tools and techniques to a broad range
       of activities to meet the requirements of the particular project. It is a crucial element in
       implementing any system or service, especially one involving a high investment in information
       technology, to support implementation with solid project management. Successful project
       management involves effective management of the following knowledge areas:

       1. S 	 cope management—defining and managing all work required to successfully complete the
            project.
       2. T 	 ime management—ability to complete the project in a structured timeframe.
       3.	 Cost management—preparing and managing a budget for the project and managing costs
            throughout the project’s life.
       4. 	Quality management—ensuring the project will satisfy stated or implied needs of the
            organization and its stakeholders.
       5. 	 Human resources management—making effective use of people to complete the project. This
            area involves delegating the most qualified, skilled person(s) to a specific task of the project to
            ensure the project is implemented effectively.
       6.	 Communications management—generating, collecting, disseminating, storing project
            information to all stakeholders.
       7. 	Risk management—identifying, analyzing, and responding to risks.
       8.	 Procurement management—acquiring or procuring goods and services that are needed from
            outside the organization.
       9. 	 Project integration management—overarching function that affects and is affected by all other
            knowledge areas. The collaborative effort of all the knowledge areas in executing the project.

       Project management is key for today’s rapidly changing environment. Traditional means of
       managing new processes cannot adequately deal with the chaos experienced in today’s working
       environment. Using project management best practices is the best way to handle such an evolving
       environment. This report provides background information and project management analysis of
       two FCA projects, Momentum Financial Management System and Travel Manager.



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History of Financial Management at FCA

        Prior to the current outsourcing of financial management services, FCA used in-house resources to
        implement, operate, and enhance its financial management system. During the 1990’s, many
        different financial management systems were implemented and used, some of which were too
        complex or inadequate at meeting the Agency’s financial management needs. As a result, FCA
        decided to outsource this service and completed implementation of the Federal Financial System
        (FFS) on schedule in June 2001.

        FFS is a major application that supports FCA’s entire core accounting functions including, budget
        execution, accounts payable, disbursements, purchasing, travel, accounts receivable, general
        ledger, document tracking, project cost accounting, and external reporting. It is a general
        mainframe computer financial management system and is owned and maintained by American
        Management Systems, Inc. (AMS). Many federal agencies have purchased FFS due to its
        reputation as a reliable and functionally robust system.

        Access to the FFS software was obtained through a cross-servicing agreement with the
        Department of the Interior’s (DOI) National Business Center (NBC). FCA did not purchase the
        software, but instead obtained access through licenses the NBC had purchased and made
        available to its cross-serviced customers.

        In the late 1990’s, AMS released a technologically enhanced financial management system called
        Momentum Financials. Since Momentum would be its primary financial management tool, AMS
        announced in March 2003 it would no longer be providing future releases (product updates) to FFS
        and would stop providing maintenance service to FFS sometime during the 2004-2005 timeframe.
        All upgrades and maintenance to FFS would now be the responsibility of each individual client,
        resulting in significantly higher costs.

        In addition, by the end of 2003, FFS no longer met certification requirements. In the late 1990’s,
        the Office of Management and Budget (OMB) required that the Joint Financial Management
        Improvement Program (JFMIP) certify financial management software before a Federal agency
        could purchase the software. This certification signifies financial management software as being
        compliant with core financial management systems requirements. The FFS was eventually
        certified as compliant. However, with Momentum as its new product, AMS decided not to seek re-
        certification of the FFS by JFMIP when the certification expired. AMS believed FFS was not worth
        certifying since its technology was now considered outdated and did not support OMB Circular A-
        130 and other security requirements. The aged system also required extensive work-arounds,
        maintenance, and increasing manual effort to conduct annual audits and generate required
        accountability reports.

        The CFO perceived an immediate need for FCA to update its financial management system. In
        choosing a financial management system, FCA faced several alternatives. In the end, the Agency
        decided to convert to Momentum. According to the Office of the Chief Financial Officer (OCFO),
        Momentum would provide the best service for several reasons including key cost savings and
        compatibility advantages. FCA reprogrammed its budget at the end of fiscal year 2003 in order to
        purchase Momentum. Implementation of Momentum was projected to cost $950,000. The five-
        year cost of Momentum is projected to be $7,067,645.




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History of Travel Management at FCA

        Travel Management in its earliest days was a paper-based process. Employees designated to go
        on travel filled out paperwork to authorize travel plans and make airline, hotel, and rental car
        reservations. In addition, travelers filled out vouchers upon their return to receive reimbursements
        for their travel expenses. With travel as a manual process, several inefficiencies arose, primarily
        time delays in reimbursing employees.

        Five different Travel Management Centers also caused some inefficiency with the travel process.
        A Travel Management Center (TMC) is an entity that serves as a medium through which
        employees make travel reservations. Since there were several TMCs through which the
        paperwork was being sent, it was extremely difficult to track the paperwork, for example, in a case
        where there was an error in the data entered.

        FCA management took action to improve the process. In January 2000, FCA consolidated the five
        TMCs into one TMC, now known as SATO. In March 2002, the Agency began implementation of
        an online booking tool called Fed Trip to streamline the travel process. Full implementation of Fed
        Trip was completed in June 2002. These two alterations improved the travel process through
        reduced time delay, less paperwork, and made the tracking of travel activities easier.

        In October 2000, FCA purchased Travel Manager. Travel Manager 8.0 is a web-based solution
        designed to further streamline the travel process. This service is provided to the FCA through an
        Interagency Agreement (IA) with NBC. To date, FCA has spent $343,189 on Travel Manager,
        excluding the cost of staff time. Cost of staff time is not available because Travel Manager was not
        set up as a project in the Time Tracking System.

        Currently, FCA is in the process of upgrading to Travel Manager 8.2. According to OCFO’s list,
                                                                 1
        approximately 67% of Agency employees (210 out of 315 ) are using Travel Manager 8.0 for the
        travel process (our Travel Manager survey, as explained later, indicates this figure is inaccurate).
        These employees will convert, along with the other 33% not using 8.0, to 8.2 once the new version
        is ready for implementation. This new version is expected to satisfy several usability complaints
        made by travelers using 8.0.


OBJECTIVE AND SCOPE

        The objective of this inspection was to review FCA’s project management and evaluate these
        efforts against project management best practices. This inspection was conducted according to
        the President’s Counsel on Integrity and Efficiency “Quality Standards for Inspections.” Our review
        included: 1) conducting background research on project management to determine best practices;
        2) obtaining information on FCA’s Financial and Travel Management Systems; and 3)
        communicating with project managers and relevant stakeholders to determine the status of
        implementation of each system.

        The scope of the inspection was limited to reviewing the implementation and project management
        of Momentum Financial Management System and Travel Manager. We researched authoritative
        guidance on best practices in project management. We reviewed project plans, budget and
        expense information, and all available correspondence relating to the implementation of each



        1
            FCA employs 289 full-time, 3 part-time and 2 intermittent employees. However, this figure also includes 21 interns.



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       system. We interviewed people involved in the projects and we conducted a survey of Travel
       Manager users.

       The entrance conference was held on June 9, 2004 and fieldwork was conducted from June 10
       through July 6, 2004. The draft report was forwarded for management review on August 3, 2004.
       The exit conference was held on August 11, 2004.


FINDINGS AND RECOMMENDATIONS

Summary

       Overall, the project management of Momentum Financial Management System and Travel
       Manager were below standards. While there were some unavoidable technical issues causing
       delay in the implementation, there were other inefficiencies present that could have been
       prevented through better project management. The implementation of each system is severely off
       course and neither project is in sequence with original project plans. Both Momentum and Travel
       Manager lack sufficient authoritative support for their costs. As a result, we question over
       $250,000 of expenditures associated with implementing these systems -- $174,161 for Travel
       Manager and $89,000 for Momentum. The OIG recommends both projects be stopped and
       reevaluated before further implementation.

       The following table presents a brief summary of our findings on project management.

                 Knowledge Area                      Momentum                 Travel Manager
                  Scope Management                        No                         No
                  Time Management                         No                        Neutral
                   Cost Management                        No                         No
                 Quality Management                       No                        Neutral
            Human Resources Management                    No                        Neutral
             Communications Management                    No                        Neutral
                   Risk Management                        No                         No
              Procurement Management                     Neutral                    Neutral
            Project Integration Management                No                         No

       A more detailed version of the chart above, outlining the best practices of each knowledge area,
       can be found in the appendix. The analysis from this table is explained below and is broken down
       into each of the nine knowledge areas.


Scope and Time Management

       Scope and time management are closely correlated. For example, as the scope of a project is
       expanded, the time it takes to finish the project will likely be expanded as well. Therefore, it is
       necessary to discuss these two knowledge areas together. In implementing both Momentum and
       Travel Manager, the scopes of both projects have expanded since they were first initiated. And as
       a result, the time it has taken for each system to be fully implemented has expanded as well.




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Implementation of Travel Manager is ongoing—over four years since it was originally purchased.
This is the case for several reasons. According to OCFO staff, with an outdated financial system at
that time, it placed priority on implementing FFS. Another reason for the delay, however, was
inefficient project management. For example, Travel Manager was purchased prior to the
development of a comprehensive project plan.

For Momentum, full implementation was originally expected to be complete June 2004. This date
is now pushed back a year to June 30, 2005. According to OCFO staff, the original project plan
and due date were created by NBC and NBC made the project schedule too aggressive. The
schedule was aggressive because there were certain aspects of FCA’s financial system that NBC
did not account for in making the plan.


                                Vague project plans

While some of the above examples reveal unavoidable issues causing delay, the planning process
is also a reason for the scope creep and time delays. The overall project plans for both Momentum
and Travel Manager are vague and not in line with project management best practices. The plans
do list tasks to be done, start and finish dates, percentage completion of each task, but do not go
into much more detail. Project task dates are not continuously updated, so it is unclear in looking
at the plan where the project stands in its implementation.

It is typical of any project to experience scope creep and time delays, as these two projects have
experienced, without adequate planning. Inadequate planning contributed to it taking over four
years to implement Travel Manager. It also contributed to the full implementation of Momentum
being delayed for a year.

Better project management practices should have been in place to make the implementation
process more efficient. The most important step in project management is the planning stage. A
well outlined, organized, and detailed project plan is evidence of good project planning. Without a
defined project plan from the beginning, achieving the goals of a project in a timely fashion is nearly
impossible.


       Finalizing project plans necessary prior to expending funds

During two interviews with OCFO staff, we asked them whether a project plan for each system was
created before expending Agency funds on each system. Neither the project manager nor the
CFO could initially declare a specific time period when the original project plans were created.
Furthermore, they could not disclose whether project plans were created before money was spent
on the systems. After a week of compiling information, OCFO determined the original project plan
for Momentum was created (but not finalized) October 21, 2003. The OCFO never determined the
date of the original project plan for Travel Manager.

In 1999, Planning Technologies Incorporated (PTI), a contractor for OIG, conducted an audit on
FCA’s Information Technology Infrastructure. Prior to the audit, the process for purchasing new
technology required the requesting department to include the request in its Information Resources
Management (IRM) plan. The IRM Operating Committee (IRMOC) would then meet to approve
the preliminary IRM plan for the entire Agency. In the audit, PTI recommended that a project
implementation plan be created and submitted along with the request before any technological
purchases could be approved. This would ensure any technology being considered would have a
start and finish date with assigned resources prior to approval. It would also allow for staff and user




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       expectations and timeliness to be discussed while considering the technology. Management
       agreed to this recommendation.

       Spending money on a project without a finalized project plan lacks solid project management
       foundation. Project management best practices are firm on creating and finalizing project plans
       before approving and beginning a project. In addition, as a result of the PTI audit, standard
       procedures for the IRMOC require a project plan before technological purchases can be approved.

       In a memo from OCFO to OIG, dated March 11, 2004, OCFO stated that approximately $89,000
       had been expended on Momentum through February 29, 2004, but that no Momentum project plan
       had been finalized at that time. This action goes against both Agency policy and project
       management best practices. Accordingly, these costs are unsupported.

       1) 	Recommended Action—For large projects, the CIO and the IRMOC should require
          managers to submit defined project plans to the IRM Operating Committee for review
          and concurrence. Before approving the plan, the IRMOC should ensure it contains:
              a. 	 An overview of the project—a defined scope, description, stakeholders,
                   deliverables
              b. 	 Organizational structure of the project—delegating resources and
                   responsibilities
              c. 	 Communication plan—what gets communicated to whom and who is
                   responsible for communication
              d. 	 Detailed contingency plan outlining how to handle risks and changes in a
                   project when they arise
              e. 	 Detailed project schedule
              f.	 Budget and cost estimates for each task
              g. 	 Provisions for reporting to the IRMOC on progress and changes in project
                   plans.


Cost Management

       Weak internal controls in budget and cost management have hindered the implementation of
       Momentum. The following are some examples found during the inspection:

       •	   The OCFO did not barcode the hardware equipment purchased for Momentum. Hardware
            and software was funded under the IA with NBC but was not recorded on FCA’s books. The
            OCFO staff was confused about the ownership of the equipment. Initially, OCFO stated OCIO
            was responsible for bar coding the equipment and indicated that it would be bar coded in the
            near future. Subsequently, OCFO indicated the equipment belonged to NBC. In an interview
            with NBC staff, they stated NBC owns the equipment and the equipment is recorded it as an
            asset on NBC books. However NBC has not bar-coded it. The decision to have NBC own the
            equipment is not documented and the IA does not specify who owns the equipment.
            However, the IA includes a line item that indicates FCA pays for equipment. Undocumented
            decisions and the lack of specific performance metrics and deliverables in the IA are indicative
            of cost management problems.
       •	   According to a memorandum from OCFO to OIG, dated March 11, 2004, OCFO spent
            approximately $89,000 through February 29, 2004 on Momentum. However, the same memo
            also indicated the IA with NBC was not finalized. The IA establishes the budget for Momentum
            and is the basis for obligating funds for the project. Because the IA lacks specifics, it is
            impossible to distinguish work that should have been performed under the expired IA from
            work that is performed in anticipation of a new IA. Because of the lack of specifics, FCA
            should not have been expending money without a signed and unexpired IA.


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       Overall, for both systems, cost management is not satisfactory. Both projects have experienced
       lengthy delays in reaching full implementation. This extends costs incurred by the Agency without
       realizing the full benefits of each system. Other evidence of ineffective cost management includes
       the fact that cost summaries (a breakdown of all costs incurred) for each project since its inception
       were not readily available to the project manager. Finally, an IA to control cost was not in effect for
       ten months of FY2004.

       It is essential with any project, especially a project that impacts the Agency as significantly as these
       two, to have strong internal cost controls in place.


Quality Management

       Quality management during the implementation of Travel Manager has shown signs of being in
       line with standard project management practices. However, implementation could benefit from
       improved project management in a few areas.

       Performance testing is a quality management best practice OCFO has exhibited in implementing
       Travel Manager. Both versions of Travel Manager have undergone thorough testing and quality
       measurements. According to OCFO, they are testing Travel Manager 8.2 and will not permit the
       release of this new version until it fully satisfies all quality standards.

       During the inspection, OIG distributed a Travel Manager usability survey to all Travel Manager
       users (excluding interns) as an additional quality assessment. Surveys were sent out to those
       employees listed on OCFO’s records as being Travel Manager users. A total of 193 surveys were
       distributed and we received feedback from 119 employees.

       The survey revealed OCFO did not provide an accurate record of FCA employees who use Travel
       Manager. Out of the 119 employees who responded, 37 said they do not use Travel Manager.
       Many of these responses came from Denver field office employees. A number of Denver
       employees are on OCFO’s records as Travel Manager users despite the fact that the Denver office
       is not presently using Travel Manager. Furthermore, OCFO’s records do not list any Dallas field
       office employees as users, even though that office presently uses Travel Manager. During the exit
       conference for this inspection OCFO attributed inaccurate list of users to a clerical error. This is a
       clear example of the importance of a quality management program and the importance of
       assessing accurate quality measurements of the new system.

       The results of the survey reveal mixed opinions on the efficiency of the system. Out of 82
       employees that responded as users of Travel Manager, 87% are satisfied or very satisfied with the
       timeliness of reimbursements. However less than half the users found filing a travel voucher
       easy—16% of users indicated “very easy” and 33% found it “somewhat easy.” In addition, only
       49% of users are satisfied or very satisfied with the overall functionality of the system. Many users,
       mostly those who do not use the system frequently, complained the system is not intuitive and is
       hard to remember how to process through the system with each use. Many recommended an
       administrative employee in each office be trained in Travel Manager and make travel
       arrangements for everyone in their office.

       Momentum implementation, on the other hand, has not exhibited satisfactory quality management.
       Since the system is not fully implemented, the Agency’s need for a JFMIP compliant financial
       management system has not been satisfied. Although the project plan does call for acceptance
       testing terms in the near future, the specifics of the tests are lacking. According to OCFO, the




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       specifics of testing are not known at this time, with Momentum still in its early stages of
       implementation. Test requirements will be known in more detail as implementation progresses.

       In addition, the quality of work performed by NBC could be called into question. NBC’s effort in
       project planning serves as an example. According to OCFO, NBC was designated the task of
       making the original project plan. However, this plan was not adequate due to an aggressive
       timeframe, and required immediate revision.


Human Resources Management

       It is important in the planning stage of a project to designate the most qualified staff to each task.
       In looking at the project plans for both Momentum and Travel Manager, human resource planning
       was not taken into consideration. Both project plans are vague in designating specific resources to
       each task. In addition, neither project plan specifies the type of FCA staff skills needed.

       A portion of the Travel Manager project plan, for conversion to Travel Manager 8.2, serves as an
       example of good human resource planning. The plan clearly delegates resources to each task,
       each resources job function, and to what tasks they are assigned. This clarity is lacking in the
       general Travel Manager project plan and is also lacking in both the original and revised project
       plans for Momentum.


Communications Management

       Communications management has been effective to some extent throughout the implementation of
       Travel Manager. The OCFO has continuously updated external parties on the progress of Travel
       Manager implementation through weekly meetings and teleconferences. In addition, our survey
       reveals approximately 66% of Travel Manager users feel OCFO has effectively communicated
       Travel Manager related information to them. However, OCFO has failed to update the Board in its
       monthly reports.

       In implementing Momentum, however, communication could be improved. According to NBC,
       most communication with OCFO is done via phone or email, and not through regularly scheduled
       meetings. Meetings are not held on a regular basis due to time constraints. The OCFO provided
       copies of correspondence between them and NBC, but no evidence of meeting minutes or
       teleconferences were found during the inspection. The OCFO has failed to report progress on
       Momentum to the Board through monthly reporting as well. At the exit conference for this
       inspection, the CFO indicated that the board members had been briefed in February on the delay
       in the project. Those meetings were not documented and specific dates of the briefings were not
       provided. The CFO also provided a document that he said he used for talking points. It is unclear
       why this document was not provided in response to several prior IG requests for information.

       The project management of Momentum could also be improved through creating a communication
       plan. In planning any project, planning and defining what gets communicated to whom and who is
       responsible for communication is a critical success factor. According to NBC, tasks were assigned
       in the project plan to hold regularly scheduled meetings. However, no formal communication plan
       was established.




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Risk Management

             Require contingency plans in place prior to project execution

       An issue that occurred during the conversion from 8.0 to 8.2 reveals another area of project
       management practices that needs improvement. According to OCFO, by August of 2003, Travel
       Manager 8.0 had been implemented to 70% of the Agency. However, at that time, a new version
       of Travel Manager (Travel Manager 8.2) was introduced to the market. FCA decided it should hold
       off further implementation of 8.0 and convert to the new version 8.2. When version 8.2 was finally
       ready to be released in March 2004, a court order forced DOI to shutdown its Internet access portal
       for 8.2 to FCA. According to OCFO, there was no contingency plan in place for 8.2 at that time,
       affecting the progress that had been made on the new version up to that point. This forced OCFO
       to backtrack their progress to get 8.2 back to the point where it could be released to the Agency.

       Having no contingency plan in place caused the delay in converting to Travel Manager 8.2.
       Creating a contingency plan is synonymous with risk management, a key criterion in establishing
       solid project management. Without a risk management plan in place prior to executing a project,
       there is no efficient way for dealing with unexpected changes/issues that may arise. As stated in
       the first recommendation, a detailed contingency plan on how to handle changes should be
       submitted as part of the project plan. Changes are possible in any project, and effective
       management of risks prior to their occurrence will allow for changes to be made without
       significantly affecting the progress of a project


                    Update to Momentum’s security plan is necessary

       The Federal Information Security Management Act (FISMA) requires Federal agencies to annually
       review and continually update information security system plans for each general support system
       and major application. It is crucial to perform these updates to ensure the security plans provide
       adequate security.

       In June 2004, Office of the Chief Information Officer (OCIO) made requests to all offices, including
       OCFO, to update their security plans for systems classified as major applications and general
       support systems. Specifically, OCIO requested OCFO to update their security plan for FFS. The
       conversion of FFS to Momentum is classified as a major application and because FFS is being
       updated, it would be necessary to update the security plan for it as well. However, OCFO’s
       response to OCIO was that “no revisions [to the security plan] were needed.” Therefore, no
       security plan is currently in place for Momentum.

       An updated security plan is another crucial element missing in the planning process for the
       implementation of Momentum and gives further support to the conclusion that project management
       of Momentum is below standards.

       2) 	 Recommended Action—As required by FISMA, the OCFO should develop a security
            plan for Momentum.


Procurement Management

       In order for both projects to be successfully implemented, it has been necessary to coordinate
       efforts with external parties. FCA established the IA with NBC for the implementation,




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        maintenance, and production of Momentum and Travel Manager. In addition, FCA coordinates
        efforts with Gelco and SATO in implementing and maintaining Travel Manager.

        Procurement management best practices not only call for organizing efforts with external parties,
        but also for finalizing contracts and/or agreements with those parties prior to a project’s
        implementation. In implementing Travel Manager, as mentioned previously, efforts with external
        parties were well organized. Efforts with NBC in implementing Momentum were also evident.

        Prior to the inspection, OCFO provided OIG with an IA for fiscal year 2003. Since the IA had
        expired, OIG requested an updated IA for fiscal year 2004. OCFO provided OIG with an unsigned
        copy of the updated IA. It was later disclosed the updated agreement was signed and finalized on
        July 22, 2004, nearly ten months into the fiscal year. This updated agreement expires September
        30, 2004.

        3) 	 Recommended Action—the CFO should establish controls that ensure the agreement
             with NBC is renewed prior to its expiration.


Project Integration Management

        The level of project management cannot be adequately measured by looking at each of the
        knowledge areas separately. However, it is necessary to look at how all of the knowledge areas
        worked collectively in achieving the goals of the project.

        In implementing Travel Manager, five of nine the knowledge areas were somewhat exhibited and
        four were not exhibited at all (Appendix 1). This has contributed to the delay in implementation,
        which has now reached four years and is still on going.

        The project management of Momentum is below standards. Momentum implementation had
        deficiencies in each of the knowledge areas. Overall, eight of the nine areas were nonexistent
        (Appendix 1). The project plan itself was vague. It did not clearly allocate resources to different
        tasks. In looking at the project plan, it also wasn’t clear what tasks had been completed and where
        the project was in its implementation.

        Other inefficiencies in implementing Momentum suggest the project is not being managed well and
        not managed in line with project management best practices. Noted inefficiencies include:
            •	   No finalized project plan in place prior to expenditures being made for Momentum
            •	   No security plan
            •	   Lack of internal control leading to inefficient cost and communications management

        These serious weaknesses in the implementation of Momentum have contributed to the expected
        yearlong delay before full implementation is achieved.

        4) 	 Recommended Action—The CFO should halt of further efforts and expenditures on
             Momentum implementation and re-evaluate the following:
                a. 	 The decision to implement Momentum
                b. 	 The agreement with service providers such as NBC to ensure they include
                     specific deliverables and performance metrics.




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Other issues

            New Federal Travel Regulations May Not Allow Use of Travel Manager
        In December 2003, General Services Administration (GSA) announced the release of the new
        Federal Travel Regulations (FTR). The new regulations require all Federal agencies to migrate to
        an approved E-Travel service from one of three online travel vendors. Agencies can choose
        among services offered by Carlson Wagonlit Government Travel Incorporated, EDS Corporation,
        or Northrop Grumman Mission Systems Corporation. In order for an agency not to use one of
        three offered services, the Chairman must request an exception. According to the regulations2, the
        GSA Administrator may grant an exception if the Agency presents a business case analysis that
        proves it has an alternative that is in the best interest of the government and the taxpayer. The
        Agency must also agree to conduct annual business case reviews and submit data to GSA. Other
        exceptions are limited to security reasons, necessity of disability accommodations, or special
        needs in accordance with Part 301-13 of the FTR.

        The regulations also require all agencies to meet certain deadlines. All agencies were required to
        submit migration plans and schedules for E-Travel service implementation to GSA by March 31,
        2004. NBC submitted a plan for its Small Agency Council Customers including FCA. The plan
        called for vendor selection and an IA by June 30, 2004. NBC conducted a review of each of the
        three systems. Subsequent to the exit conference, the OIG found NBC has selected Carlson
        Wagonlit Government Travel Incorporated and sent a new IA, reflecting the new travel
        management system to FCA on July 19, 2004. In corresponding with OCFO on this issue during
        fieldwork, the CFO stated FCA is currently working with NBC. However, in other correspondence,
        OCFO staff stated they are currently conducting mock trial testing on Travel Manager 8.2 in
        preparing it for Agency-wide implementation. The CFO did not provide the new IA to the OIG even
        though it was material to the inspection. Also, the CFO did not disclose the new IA during the exit
        conference. Subsequently, the CFO stated that FCA did not have the $7,000 to fund the new
        agreement and he still wanted to explore other alternatives and he did not recall being asked about
        the matter.

        All agencies must begin migration to their selected E-Travel service by December 31, 2004. E-
        Travel services must be fully implemented by all agencies no later than September 30, 2006. FCA
        is currently using Travel Manager 8.0, which is not one of the three E-Travel services approved by
        GSA in accordance with the new FTR. It is wasteful for FCA to expend time and money to update
        and implement a system that is not approved under the FTR. Accordingly, the OIG questions the
        costs associated with Travel Manager, which have amounted to $174,161 for fiscal year 2004.

        5) 	 Recommended Action—The CFO should select an E-Travel service as required by
             Federal Travel Regulations and establish a project plan to implement the service.
             Alternatively, the CFO should provide an analysis and recommendation to the
             Chairman to request an exception from the GSA Administrator.




        2
            41 CFR 301-73.104



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APPENDIX 1—Project Management Best Practices Analysis


                 Knowledge Area                                              Momentum                      Travel Manager
Scope Management—Overall                                                             No                                 No
    •   Clearly defined project charter with goal and                   No                                No
        purpose of project
    •   Develop change management process                               No                                No
        including costs of making change
•       Avoid scope creep                                               No                                No

Time Management—Overall                                                              No                             Neutral3
    •   Develop a clearly defined project schedule                      No                                Neutral
        with tasks broken down into small pieces
    •   Include entire project team in planning in                      No                                Neutral
        order to minimize tasks overlooked
    •   Time needed for project for various resources                   No                                Neutral
        clearly defined. Often, time is underestimated
Cost Management—Overall                                                              No                                 No
    •   Budget guidelines established and finalized                     Neutral                           Neutral
        prior to project initiation. Include costs for
        consulting, maintenance, and travel and
        professional development in budget.
    •   Designate authority to make budget decisions                    Unknown4                          Unknown
    •   Continually track expenditures during project                   No                                No
        execution
Quality Management—Overall                                                           No                             Neutral
    •   Projects to undergo thorough testing                            Unknown                           Yes
    •   Customer satisfaction key                                       Unknown                           Neutral
    •   Ensure scope statement has specific                             No                                No
        measures of success so that it is easier to
        determine if project is meeting objectives

Human Resources Management—Overall                                                   No                             Neutral
    •   Identify knowledgeable resources for project
        team and involve as soon as possible.                           Unknown                           Yes
    •   End users should be involved early in the
        project and updated throughout                                  Not applicable                    Neutral
    •   Clearly define staff roles and responsibilities
        in project plan                                                 No                                Neutral




          3
              A “Neutral” rating indicates the knowledge had been demonstrated but it was not consistently applied during the project.
          4
              An “Unknown” rating indicates the knowledge was not documented but may be at a later time.



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             Knowledge Area                                    Momentum         Travel Manager
Communications Management—Overall                                   No                Neutral
   •   Outline communication plan prior to project
       execution. Plan should define what gets            No                    No
       communicated to whom and who is
       responsible for communication
   •   Hold regular meetings with project team and
       sponsors to ensure tasks are completed and         No                    Yes
       update all parties on project status
   •   Identify point of contacts responsible for
       relaying information                               Yes                   Yes
   •   Reporting progress to Agency head and
       relevant stakeholders                              No                    No


Risk Management—Overall                                             No                  No
   •   Risks and procedures to handle risks
       identified prior to project                        No                    No
   •   Develop and approve all risk management
       plans prior to project                             No                    No
   •   Take into account staff turnover during the
       project and how new staff will be brought up       No                    No
       to speed

Procurement Management—Overall                                   Neutral              Neutral
   •   Organize efforts with all external parties prior
       to project                                         Yes                   Yes
   •   Finalize all contracts and/or agreements with
       external parties prior to project                  No                    No

Project Integration Management—Overall                              No                  No
   •   Develop a project plan that integrates all of
       the other knowledge areas                          No                    No
   •   Periodic reviews should occur to determine if
       the project should continue                        No                    No




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 APPENDIX 2—Travel Manager Survey Results

Appendix 25

                                                 Ease of filing travel voucher



                                                      No answer, 7.3%

                                                                                   Very easy, 15.9%
                                      Very hard, 4.9%



                                 Somewhat hard,
                                    18.3%


                                                                                           Somewhat easy,
                                                                                              32.9%

                                       Neither easy or
                                        hard, 20.7%




                                             Timeliness of Reimbursements


                                                                                  Some
                                                         Dissatisfied, 0.0%   dissatisfaction,
                                                                                   1.2%
                                               No answer, 4.9%
                                                                                   Neutral, 7.3%




                                    Very satisfied,                                        Satisfied, 36.6%
                                       50.0%




              5
                  Note: Percentages based on 82 valid survey responses and exclude 37 responses that indicated they did not use Travel
                  Manager.



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6



                            Level of Communication with OCFO


                                             Ineffective 0.0%         Somewhat
                             No Answer 6.1%                        ineffective 6.1%



                                                                           Neutral 22.0%
                   Very effective 23.2%




                                                Effective 42.7%




                         Overall Satisfaction of Travel Manager



                                     No answer 4.9%             Dissatisfied 8.5%

                            Very Satisfied                                   Some
                               12.2%                                     dissatisfaction
                                                                             17.1%




                        Satisfied 36.6%                                     Neutral 20.7%




6
    Note: Percentages based on 82 valid survey responses and exclude 37 responses that indicated they did not
    use Travel Manager.



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 APPENDIX 3—Management Response

APPENDIX 3




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