Information Technology:

Actions Needed to Fully Establish Program Management Capability for VA's Financial and Logistics Initiative

GAO-10-40: Published: Oct 26, 2009. Publicly Released: Dec 1, 2009.

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Since 2005, the Department of Veterans Affairs (VA) has been undertaking an initiative to develop an integrated financial and asset management system known as the Financial and Logistics Integrated Technology Enterprise (FLITE). FLITE is the successor to an earlier initiative known as the Core Financial and Logistics System (CoreFLS) that the department undertook in 1998 and discontinued in 2004 because it failed to support VA's operations. In light of the past performance of CoreFLS and the Office of Management and Budget's designation of FLITE as high risk, GAO was asked to (1) determine the status of pilot system development and (2) evaluate key program management processes, including VA's efforts to institute effective human capital management, develop a reliable program cost estimate, use earned value management (a recognized means for measuring program progress), establish a realistic program schedule, employ effective requirements development and management, and perform independent verification and validation. To do so, GAO reviewed program documentation and interviewed relevant officials.

Contract award and performance of work tasks had been started for one of two planned pilot systems--the Strategic Asset Management system. However, as of mid-September, the project had fallen behind (by 2 months) and the contractor had missed the deadline for initiating and completing planned tasks and delivering work products such as a system security plan. In particular, the contractor had not started 11 of 34 tasks, including conducting a security assessment, and was behind schedule on 16 of the remaining 23 tasks, including analyzing business processes. Program officials generally attributed the delays to VA having insufficient program and acquisition staff to perform necessary activities associated with awarding and executing the pilot contract and to poor project management by the pilot system contractor. A second project--for the Integrated Financial Accounting System pilot--is expected to start in October 2009. VA has taken steps to institute effective management of FLITE; however, the department has not yet fully established capabilities needed to ensure that the program will be successfully implemented. Specifically, VA has (1) recently filled long-standing staff vacancies, and only one program office staff opening remains; (2) not developed a cost estimate that includes total program costs or reconciled its estimate with an independent estimate; (3) not performed key actions necessary for reliable earned value management; (4) not yet established a schedule that is reliable; (5) not identified all mandatory federal financial management system requirements and ensured that system requirements are based on business requirements; and (6) not addressed all of the findings of its independent verification and validation organization in a timely manner. Until VA reconciles its cost estimate, ensures compliance with earned value management system standards, establishes a reliable schedule, ensures all relevant federal and system requirements are identified and traceable, and addresses all independent verification and validation findings, it could continue to experience schedule delays and further increase its risk of not providing the financial and asset management capabilities that users need.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To help guide and ensure successful completion of FLITE, the Secretary of Veterans Affairs should direct and ensure that the Assistant Secretary for Management and the Assistant Secretary for Information and Technology ensure that all relevant and applicable federal financial management system requirements are included in FLITE's requirements and establish and maintain requirements traceability.

    Agency Affected: Department of Veterans Affairs

    Status: Closed - Implemented

    Comments: In comments on the report, VA concurred with the recommendation and took steps to address the issues that we identified. For example, VA began using software to manage business requirements for the SAM pilot and planned to use this tool to ensure bidirectional traceability of requirements, including those for federal financial management systems. Although the agency canceled the overall FLITE Program in July 2010 and terminated the SAM project in October 2011, we consider the initial steps taken to be responsive to our recommendation to establish and ensure requirements traceability.

    Recommendation: To help guide and ensure successful completion of FLITE, the Secretary of Veterans Affairs should direct and ensure that the Assistant Secretary for Management and the Assistant Secretary for Information and Technology complete a revised integrated master schedule that includes all key program activities, including reconciliation of the program cost estimate and implementation of earned value management, and identifies all resources and dependencies.

    Agency Affected: Department of Veterans Affairs

    Status: Closed - Implemented

    Comments: In comments on the report, VA concurred with the recommendation and took steps to address the issues that we identified. For example, VA began developing an integrated master schedule for the SAM pilot that incorporated key project activities and critical inter-dependencies between VA and the SAM pilot contractor. Although the agency canceled the overall FLITE Program in July 2010 and terminated the SAM project in October 2011, we consider the initial steps taken to be responsive to our recommendation to revise the integrated master schedule.

    Recommendation: To help guide and ensure successful completion of FLITE, the Secretary of Veterans Affairs should direct and ensure that the Assistant Secretary for Management and the Assistant Secretary for Information and Technology improve the reliability of program earned value management reporting by ensuring that contractor earned value management systems comply with industry standards.

    Agency Affected: Department of Veterans Affairs

    Status: Closed - Implemented

    Comments: In comments on the report, VA concurred with the recommendation and took steps to address the issues that we identified. For example, VA included a requirement in the SAM pilot contract to develop EVM measures and also required the contractor to provide documentation ensuring certification of their EVM system. Although the agency canceled the overall FLITE Program in July 2010 and terminated the SAM project in October 2011, we consider the initial steps taken to be responsive to our recommendation to improve reliability of EVM reporting.

    Recommendation: To help guide and ensure successful completion of FLITE, the Secretary of Veterans Affairs should direct and ensure that the Assistant Secretary for Management and the Assistant Secretary for Information and Technology improve the reliability of the program cost estimate by ensuring that the estimate includes system operations and maintenance costs and that the estimate is reconciled with the independent cost estimate.

    Agency Affected: Department of Veterans Affairs

    Status: Closed - Implemented

    Comments: In comments on the report, VA concurred with the recommendation and took steps to address the issues that we identified. For example, VA initiated a contract for a follow-on independent cost analysis, which was to include system operations and maintenance costs for the FLITE Program. Although the agency canceled the overall FLITE Program and terminated the SAM project in October 2011, we consider the initial steps taken to be responsive to our recommendation to improve reliability of the FLITE program cost estimate.

    Recommendation: To help guide and ensure successful completion of FLITE, the Secretary of Veterans Affairs should direct and ensure that the Assistant Secretary for Management and the Assistant Secretary for Information and Technology ensure that all comments from independent verification and validation reviews are addressed.

    Agency Affected: Department of Veterans Affairs

    Status: Closed - Implemented

    Comments: In comments on the report, VA concurred with the recommendation. Specifically, the FLITE Program and the appropriate document owners addressed the 117 outstanding System Quality Assurance Service (SQAS) findings referenced in the GAO report. SQAS reviewed the document changes, validated that comments and recommendations were adjudicated and incorporated into updated versions of the documents. In addition, the FLITE Program developed a Document Management Plan to enable the FLITE Program to incorporate all comments with a 10-15 day review period. Although the agency canceled the overall FLITE Program in July 2010 and terminated the remaining IT project in October 2011, we consider the steps taken to be responsive to our recommendation.

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