District of Columbia: New Financial Management System

Published by the Government Accountability Office on 1999-06-18.

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

      United States

GAO   General Accounting Office
      Washington, D.C. 20648

      Accounting and Information
      Management Division


      June 18,1999

      The Honorable Ernest J. Istook, Jr.
      Chairman, Subcommittee on the
       District of Columbia
      Committee on Appropriations
      House of Representatives

      Subject: District of Columbia: New Financial Management Svstem

      Dear Mr. Chairman

      The House Appropriations Committee’s Subcommittee on the District of Columbia has had a
      continuing interest in the District’s efforts to acquire a new financial management system. On
      March 3,1999, we briefed your office as part of a series of assignments focusing on the status
      of the acquisition progress of the District’s new System of Accounting and Reporting (SOAR).
      This letter provides additional data responding to follow-up inquiries on training attendance,
      contract costs, software applications, the implementation of SOAR at the University of the
      District of Columbia, and transition assktance.

      Question 1: What are the training attendance statistics for SOAR by agency?

      GAO ResDOW?: Training attendance statistics for the period January 1998 through April 1999,
      as provided by the SOAR Deputy Program Director, indicate the following:

      l   District-wide, over 9,000 training slots were scheduled;
      l   58 percent of those scheduled for training attended; and
      l   42 percent did not attend scheduled training.

      The following table provides a breakdown of reported attendance by District agencies for
      SOAR training courses.

                                            GAO/A&ID--99217R D.C. Financial Management System

Table 1: Reported Training Attendance by District Agency for the Period January 1998 Through A@

                                         Number of        Number       Number who Percentage who
                                                St.&f         who          did not        did not
 Agents                                   scheduled      attended           attend         attend
 office of the Chief Fkxmcial Officer          2,233          1,170            1,068          47.7
 Department of Public Works                    1,205            815             390            32.4
 D.C. Public Schools                             724            429             295            41.0
 Department of Housing Development               551            356              195           35.4
 Financial and Techniql Services                 510            294             216            42.4

Source: District of Columbia O&e of the Chief J?inancialOfEcer, SOAR Program Of&e. We did not
independently verify this information.

The SOAR Program Director told us that the overall 42 percent nonattendance rate was
unacceptable. He pointed out that training costs are currently being financed centrally under
the umbrella contract with KPMG. He stated that a number of initiatives are being
considered to improve attendance, for example, having agencies absorb the cost of the
training when their employees fail to show up for scheduled trainmg. Also, District officials
told us that they plan to pilot a job certification program for employees in financial positions
at one District agency this summer. Under this program, employees would be certified for
financial positions based on training and testing.

Question 2: What are the reported contract costs and total hours by deliverables for SOAR?

GAO Response: District contract agreements for SOAR implementation total approximately
$26 million ($21 million for the contract with KPMG and $5 million for James Martin
Government Consulting) for the period 1997 through 2002. The SOAR implementation effort
includes approximately 70 deliverable work products for KPMG. The following table reflects
the reported contract amounts and total hours for the deliverables in the various phases of
the project.

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Table 2: Reported Contract Amounts for SOAR Deliverables

1 Deliverables                                          I      Hours 1      Reoorted CCmtract
                                                                      I                anlonnt
    Phase 1 Project Management                          !      12,068 I             $ 1,249,897
    Phase 2 Requirements Con&n&on                       I       4,424 1                 541,920
    Phase 3 Infrastructure Analysis                               400                    58,159
    Phase 4 Financial SystemsImplementation                    60,032                 7,262,240
    Phase 5 External Interfaces                                 9,441                 1,391,520
    Phase 6 Conversion                                         10,000                 1,016,430
    Phase 7 Training                                            2,080                   582,710
    Phase 8 Business processing                                36,057                 4,459,890
    reengineering service.S
    Other deliverables
     Optional technical services                                                         695,760
     Software maintenance                                                              1$x32,795
     Hardware maintenance                                                              1,409,769
     COTS training (option years 1 - 4)                                                1,513,500
     Total                                                      134,502             $21,214,590
                                                              . .
Source:District of ColumbiaOffice of the ChiefFinancialOfficer, SOARProgramOflice. We did not independentlyverify this

As of December 21,1998, the SOAR Program Office had requested additional funding for six
contract modifications totaling $8.4 million. The modifications were to support
(1) knowledge transfer at the major agencies through fiscal year 2000, (2) centralized
transition assistance for remaining agencies through fiscal year 2000, (3) interfaces for
remaining agencies and feeder systems, (4) SOAR implementation at the University of the
District of Columbia, (5) specifk knowledge transfer at DE. Public Schools, and (6) the
implementation of the Advanced Purchasing Inventory Control system (ADPICS) modules for
the Office of the Chief Financial Officer.

Question 3: Which applications of the vendor’s financial management package is the District
of Columbia government implementing?

GAO Resnonse: The District purchased 4 of the I3 available applications in the vendor’s
mainframe and client/server financial management product line for state and local
governments. These applications may be used separately or as part of an overall system
depending on the client’s current environment, objectives, and constraints. The SOAR
Program Director told us that the applications purchased by the District incorporate both
mainframe and client/server products to meet its requirements as outlined in the request for
proposal. The 13 applications available in the vendor’s product line from which the I&strict
could have selected are described below.

The mainkame financial software includes the following:

l     ADPICS addresses a wide range of processing requirements in the functional areas of
      requisition process, bid processing, purchasing, receiving, and inventory management and
l     The Relational Standard Accounting and Reporting System (R*STARS) includes general
      and subsidiary iedger accounting, appropriations, departmental allotments,

Page 3                                          GAO/AIMD-99-217R D.C. F’inancial Management System

  encumbrances, expenditures, accounts payable, warrant preparation, reconciliation, fixed
  assets, project and grant accounting, performance accounting, cash management, and a
  fully automated year-end closing.
a The F’inancial Accounting Management Information System is a fully integrated financial
  management system that includes, among other components, general ledger and
  subsidiary accounting, budget preparation and planning, cost accounting, check writing,
  and reconciliation.
l The Budget Preparation System allows agencies and budget analysts to enter detailed
  budget requests, manipulate and adjust them as successive reviews are completed, and
  receive detail and summary-level reports. It also supports budgets for grants and capital
  projects for expenditures and revenues.
l The Graphical User Interface Capability is an integrated, Windows-based graphical
  interface for financial management software.

The client/server financial software includes the following

   Performance Budgeting is designed to help develop, review, approve, and publish
   Performance Executive is an advanced executive information/decision support
   application that consolidates data from other external applications.
   Performance Accounting allows users to enter budget transactions, revenue transactions,
   expenditures (including preencumbrances and encumbrances), and journal entries
   directly into the financial system.
   Performance Asset Management supports accounting, management, and control over all
   capital and controllable asset items.
   Performance Cost Allocation supports the distribution of indirect costs and performance
   data across programs, projects, and other categories.
   Performance Inventory provides complete functionality for tracking inventory.
   Performance Labor Distribution performs detailed distribution of personnel costs,
   collects performance measures, and .records costs associated with equipment and supply
   Performance Purchasing supports requisitions, solicitations, bids, purchase orders,
   invoicing, and receiving for a fully eutomated procurement process.

As shown in the following table, the District has installed and plans to fully implement three
of these applications and a portion of a fourth.

 Page 4                                GAO/AIMD-99-21’7R D.C. Financial Management System

Table 3: WMG Applications       Installed by the District      of Columbia Goyvernment for SOAR

    KPMG applications                    SOAR                                      Comments
    Accounting. R*STARS                  IIlsaed.
                                     I                                         I

    Performance Budgeting                Installed.

    Performance Executive                Installed.
    Purchasing: ADPICS                   The Distzict is implementing the          Components in ADPICS such as bid
                                         purchasing and inventory control          processing, receiving, and requisition
                                         module of the ADPICS software             processing were not included in the new
                                         as an interface with the District’s       financial managementpackage because
                                         new procurement system.                   these are redundant with the new
                                                                                   procurement system components.
Source:   KPMGTechnicalSupportServices.

Question 4: What is the cost of the implementation of SOAR at the University of the District
of Columbia (UDC) and what are the components of that cost?

GAO Resnonse: Originally, UDC was acquiring a separate system that specialized in higher
education accounting. Subsequently, UDC determined that SOAR could satisfy its
requirements and opted to install SOAR rather than a separate new system. The District
negotiated with KPMG under the umbrella of the original contract. The cost for this
increased functionality is estimated at about $1 million. The costs are not-to-exceed amounts
and the labor categories a.ndrates are the same as those for the ongoing District-wide
implementation of SOAR. KPMG developed a two-phased work plan that includes project
management and systems and process integration. The components of the cost are based on
the following

0     overall project management,
0     process reengineering,
0     infrastructure analysis,
l     system installation and implementation,
.     training,and
0     post-implementation support.

Question 5: Which District agencies do not plan to utilize the new furancial management
system, and why?

GAO ResDonse: It is our understanding, based on discussions with the SOAR project office
and review of implementation documents, such as the project plan, agency rollout schedule,
and tmining plan, that SOAR will be implemented in all Diqtrict agencies.

Question 6: What types of resources are-dedicated to transition assistance?

GAO Resnonse: According to District officials, SOAR users have several avenues for problem
solving relating to the operation of SOAR. Users may use reference material (tool kits, SOAR
instruction-manuals, and training materials), contact the SOAR Help Desk, and obtain
assistance from the Technical Infrastructure SWAT Team. This team works on an adjunct

Page 5                                          GAO/~-9!3-217R             D.C. Financial Management System

basis to the Help Desk, and its primary function is to focus on solving critical and urgent
infrastructure problems related to current financial systems implementation. The SWAT
team presently consists of 16 members from the following offices:

l      the Chief Technology Office with .responsibili@ for issues related to the D.C. Wide Area
*      the Office of the Chief Financial Officer/Office of the Chief Information Officer with
       responsibility for issues related to the F’inancial Information Systems;
l      the agency technical leads with responsibility for issues related to the agencies’local area
       networks and applications; and
l      the information technology project technical leads with responsibility for issues related to
       the specific information technology projects.

We conducted our work from March 1999through May 1999 in accordance with generally
accepted government auditing standards. We requested comments on a draft of this letter
from the District’s Chief F’inancial Officer. The Chief Financial Officer provided clarifying
comments that we incorporated into this letter as appropriate.

    We are sending copies of this letter to Representative James P. Moran, Ranking Minority
    Member, Subcommittee on the District of Columbia, House Committee on Appropriations;
    Representative Thomas Davis, Chairman and Representative Eleanor Holmes Norton,
    Ranking Minority Member, Subcommittee on the District of Colmbia, House Committee on
    Government Reform; Senator Kay Bailey Hutchinson, Chairwoman, Subcommittee on the
    District of Columbia, Senate Committee on Appropriations; Senator Richard Durbin, Ranking
    Minority Member, Subcommittee on the District of Columbia, Senate Committee on
    Appropriations, and Subcommittee on Oversight of Government Management, Restructuring
    and the District of Columbia, Senate Committee on Governmental Affe        and Senator
    George Voinovich, Chairman, Subcommittee on Oversight of Government Management,
    Restructuring and the District of Columbia, Senate Committee on Governmental Affairs. We
    are also sending copies to the Honorable Anthony A Williams, the Mayor of the District of
    Columbia, and Valerie Holt, Chief F’inancial Officer, District of Columbia Copies will be
    made available to others upon request.

    If you or your staff have further questions or would like to discuss our responses in more
    detail, please contact me or Norma Samuel at (202) 512-4476. Key contributors to this
    assignment were John C. Martin and Linda Elmore.

    Sincerely yours,

    Gloria L. Jarmon
    Director, Health, Education and Human Services
     Accounting and l3nancial Management Issues


    Page 6                                GAO/AIMD-99-217R D.C. F@mcial Management System
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