The Office of Management and Budget would grant itself more oversight power over agency financial system modernization efforts under a proposed memo that could be released by OMB Director Peter Orszag.

The draft memo would have the 24 Chief Financial Officer Act agencies halt planned financial system modernization projects worth at least $10 million, while existing efforts would be prohibited from issuing new task orders worth more than $500,000 without OMB review.

Within 60 days of the proposed order, affected agencies would have to present revised project plans to OMB.

The draft memo blames large-scale efforts that try to achieve broad-based business transformations for the cost overruns and schedule delays typical to financial modernization efforts. Agencies should divide projects into smaller segments that last no longer than 90 days and projects shouldn't take more than 24 months in total, the draft memo states.

The memo was first drafted June 1 on the computer of an OMB staffer, according to the document's metadata. It would also end a requirement that CFO Act agencies look to shared services from the financial management line of business, stating that past attempts at shared services under the FMLoB "yielded inconsistent results."

Large- and medium-sized agencies found the same costs and risks with a shared service provider as they did with in-house efforts, the memo states. Agencies also have turned to shared services mostly for low-impact services such as common hosting and skipped higher-impact areas such as common transaction processing.

OMB, the Treasury Department and the CFO Council will facilitate development of common automated solutions for transaction processing; first priorities would focus on processing of vendor invoices and intergovernmental transactions, the draft memo states.

For more:
- read the draft memo on the "Immediate Review of High-Risk Financial Systems IT Projects"

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