OMB's new approach to agency financial modernization lacks strategy, says GAO

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The Office of Management and Budget's new approach to federal financial system modernization is riddled with uncertainty, according to a new Government Accountability Office report.

Specifically, although OMB has directed agencies to adopt to-be-developed common automated solutions for certain common transactions and warned them against financial system projects that take longer than 24 months to implement, it nonetheless lacks a strategy and a concept of operations to guide implementation efforts, the GAO states. The congressional watchdog issued its report on OMB's new financial system modernization thinking on Sept. 8.

For example, when it comes to agency adoption of common processing solutions--such as for intergovernmental transactions--without an established concept of operations, it's unclear how those common solutions will integrate with existing core financial systems, the GAO notes. The report cites Institute of Electrical and Electronic Engineering guidance which states that a concept of operations is normally one of the first documents produced during a disciplined development effort.

OMB official told GAO auditors they're developing a concept of operations, but did not provide a timeframe for its completion. OMB officials also said they're updating OMB Circular A-127 to include new standards for agencies when developing and updating federal financial management system requirements. However, GAO auditors add that it's not clear whether OMB will keep those standards up to date, and if it won't, then which organization will.

As for OMB's directive that agencies not implement financial system efforts that take longer than 24 months to complete, the GAO report says OMB lacks guidance to ensure that such efforts provide needed functionality rather than merely comply with a scheduled deadline.

In oral comments to GAO auditors, OMB Controller Danny Werfel said it's yet too early to draw any conclusions about OMB's new approach to financial system modernizations.

For more:
- download the report, GAO-10-808 (.pdf)
- download OMB memo M-10-26 (.pdf), which outlines OMB's new approach to federal financial systems  

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