OMB claims two cancellations, two re-scopings in financial management IT reviews

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Office of Management and Budget-led reviews of agency financial management systems have resulted in the cancellation of two such efforts and a significant paring of two others, said OMB Controller Danny Werfel during a Sept. 15 call with reporters.

Specifically, the Small Business Administration has canceled its planned Loan Management and Accounting System and the Veterans Affairs Department scratched the financial management portion of its Financial and Logistics Integrated Enterprise project. Those agencies would have spent $113 million and $423 million on the demised projects, respectively, according to federal officials. 

Also, the Environmental Protection Agency has cut $180 million worth of future planned spending on its Financial System Modernization Project while the Department of Housing and Urban Development has taken a red pencil to $44 million of planned spending for its HUD Integrated Financial Management Improvement Project.

OMB told agencies in June to freeze spending on financial management systems worth more than $20 million until OMB has reviewed them; the reviews on all 20 affected systems should be complete by mid October, Werfel said.

Which projects are scuppered or re-scoped isn't necessarily function of how badly managed they may be, Werfel added.

"A decision to cancel a project is not necessarily because there are management deficiencies," he said. "Just because a project is being managed efficiently today doesn't mean we shouldn't be looking at the risks down the road."

Competing priorities or changing technology needs with a federal agency might mean that money meant for a financial management system could be better reallocated elsewhere, Werfel said.

At the very least, that's what happened with the SBA project, Werfel said. As for whether the functionality and anticipated funding removed from the EPA and HUD projects is restored, that depends on agency and agency contractor performance in the meantime, he added.

For more:
- listen to audio of the Sept. 15 press call with Danny Werfel; also briefly on the call was Jeffery Zients, OMB deputy director for management.
- read a Sept. 15 blog post by Zients on the reviews

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