United States GAO General Accounting Office Washington, D.C. 20648 Accounting and Information Management Division B-282421 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 B-282421 Table 1: Reported Training Attendance by District Agency for the Period January 1998 Through A@ 1999 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. Page 2 GAO/~-99-217R D.C. Financial Management system B-282421 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 infoImatiolL 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 control. 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 B-282421 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 budgets. 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 usage. 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 B-282421 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 B-282421 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 Network; * 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, v Gloria L. Jarmon Director, Health, Education and Human Services Accounting and l3nancial Management Issues (916274) Page 6 GAO/AIMD-99-217R D.C. F@mcial Management System Ordering Information The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and Mastercard credit cards are accepted, also. 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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)