District of Columbia: Weaknesses in Financial Management System Implementation

According to the Director, of the SOAR Program Management Office, prior to the decision to migrate to the new financial management systems (SOAR), the Office of the Chief Financial Officer (OCFO) initiated several studies to (1) assess the status of the District's financial management operations and (2) assess the current financial policies and operating procedures. The OCFO has since developed a financial procedures manual, consisting of several volumes, that describes the systems being used, principles involved, governing policies, and procedures used to complete tasks related to the District's financial operations. The Office of the Chief Technology Officer (OCTO) issued program management standards that provide (1) a framework to assist in the initiation, planning, execution, control and close-out of acquisition projects, and (2) program elements that detail policy, organizations, engineering tasks, processes and documentation necessary for professional execution of technology acquisition projects. A key initiative associated with the District's existing information technology program is to continue enhancement of the financial systems including SOAR and its integration with payroll, cash management and reporting systems, maintaining accurate systems and modifying them in response to changing needs of the District. The District also issued a Professional Guide to Information Technology Product Standards in 2002 that lists technology standards spanning all areas of the automated environment, ranging from hardware to software, and provides supporting information, including details about each standard and terminology. These standards must be followed consistently District-wide to ensure that information technology materials, products, processes, and services serve their purpose. OCTO updates the guide annually with new standards established by the District's Technology Review Board, who is charged with setting standards focusing on business requirements and benefits.

According to the Director, SOAR Program Management Office, the District's concepts of financial operations are documented in the financial policies and operating procedures. Changes to these policies are made to complement changes in the operating systems that are necessary due to changes in technological advancements. Through seminars, workshops, training sessions and other forums, these changes are discussed with the organizational elements on a continuous basis. The District's "Professional Guide to Information Technology Product Standards" lists technology standards spanning all areas of the automated environment, ranging from hardware to software. Directives issued by the Office of the Chief Technology Officer states that these standards must be followed consistently District-wide to ensure that information technology materials, products, processes, and services serve their purpose.

According to the Director of the SOAR Program Management Office, prior to the implementation of the District's new financial management system (SOAR), action plans were developed that addressed the issues of policy and procedural implications of the migration to the new financial management system. Also included in this assessment was a study that reviewed the processes and procedures at that time. Since then, the Office of the Chief Technology Officer (OCTO) established a policy that instituted evaluation criteria for acquiring and implementing computer systems (both hardware and software) and put a disciplined approach in place. This policy identifies the roles and responsibilities of OCTO and District agencies as related to compliance with the policy. Also, in the District's fiscal year 2005 budget, funding for the Office of the Chief Financial Officer was increased to procure additional equipment due to information technology needs, train system users, and support the new budget system.

The District's Office of Chief Technology Officer (OCTO) established program management standards for system development and technology acquisition. The standards define the processes necessary to ensure the context of the proposed solution meets identified business needs and requirements. Key areas discussed in these standards are requirements development, project management, quality verification processes, development of a training plan. As part of the its Administrative Services Modernization Program (ASMP) initiative, the District conducted conference room pilots, system and user acceptance testing, and training, and developed standard operating procedures and job aids. ASMP is intended to modernize the District's office operations and integrate key administrative functions, including human resources, budget and planning, payroll/time and attendance, benefits and pensions, and property management. ASMP focuses on processes, policies, organizational improvements and business areas across the District government. These new business processes are intended to flow horizontally instead of vertically, tying all District agencies together. Using a holistic (people, process, policy and technology) approach, the project is overseen by an executive steering committee led by the City Administrator/Deputy Mayor and includes directors from 15 District agencies.

The District's Chief Financial Officer began an assessment of the District's human capital needs for financial management in November 2000. The CFO obtained professional and technical services and used the GAO Human Capital checklist to review the organizational structure and identify performance measures and best practices. The CFO formed a taskforce, which included members from the District's executive branch, to implement recommendations provided from this review. The taskforce was directed to ensure that all aspects of the GAO "Human Capital: Self-Assessment Checklist" were addressed and to review the competencies and training curriculum for the financial management staff. To keep abreast of changes made as a result of implementing new financial and performance management systems, the CFO now requires staff to reinforce their skills and acquire related training in the new systems and processes. For fiscal year 2005, the Office of the Chief Financial Officer established a performance measure for that 90% of the appropriate staff will receive the necessary training and tools to access the financial management systems. One of the District's goals for fiscal year 2005 is to develop a highly skilled and professional workforce as measured through 100% compliance and execution of individual development plans (IDPs). The IDPs should reflect specific milestones and targets for activities supporting employee growth, such as training, seminars, cross-training activities, and self help material). In April 2005, the Deputy CFO for Financial Operations and Systems testified before the DC Council that specialized training is being conducted and they will continue to provide general SOAR training to employees as well as targeted training to assist with agency specific accounting requirements.

The District's Chief Financial Officer (CFO) began an assessment of the District's human capital needs for financial management in November 2000. The CFO obtained professional and technical services and used the GAO Human Capital checklist review the organizational structure and identify performance measures and "best practices"

With support from the Mayor and DC Council, the Office of the Chief Financial Officer has initiated several projects to improve budgetary, performance and financial practices. These projects have resulted in changes to the District structures and methodologies for managing performance and budgets. Beginning in fiscal year 2003 with the implementation of performance-based budgeting (PBB), the District was required to shift to a continuous process of planning, budgeting and evaluating programs from its existing budgetary practices and program structure. For example, District agency program structures align agency resources to work an agency performs and agency spending is shown more clearly, thus allowing policy makers to know exactly where an agency is spending its allotted dollars. As of September 30, 2004, a total of 56 out of 70 operating District agencies had completed transition to PBB. In coming years, as the PBB implementation matures with performance data collection and reporting processes, the budget development process will shift focus from technical budgeting to program costs and program results. During fiscal year 2004, the District developed the Agency Management Program (AMP) to tract costs for common administrative expenses across the District, including financial services, information technology, property management, labor-management partnership, and personnel. Also, parallel to the implementation of PBB, the District is developing a new web-based budget system intended to simplify, standardize and systematize the budgeting and planning processes, and assist District officials in overseeing the budgeting process as well as monitoring agencies? performance. Furthermore, the DC Council mandated that 20 services, such as the Auto Theft Unit within the Metropolitan Police Department, transition to service-level budgeting. In February 2005, the Deputy CFO for Budget and Planning testified before the DC Council that they will continue to phase-in service-level budgeting over the next few years.