Financial Management Systems:

DHS Faces Challenges to Successfully Consolidating Its Existing Disparate Systems

GAO-10-76: Published: Dec 4, 2009. Publicly Released: Dec 4, 2009.

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In June 2007, GAO reported that the Department of Homeland Security (DHS) had made little progress in integrating its existing financial management systems and made six recommendations focused on the need for DHS to define a departmentwide strategy and embrace disciplined processes. In June 2007, DHS announced its new financial management systems strategy, called the Transformation and Systems Consolidation (TASC) program. House Report No. 110-862 directed GAO to determine whether DHS had implemented GAO's prior recommendations. GAO also assessed whether there were additional issues that pose unnecessary risks to the successful implementation of the TASC program. GAO reviewed relevant documentation, such as the January 2009 request for proposal and its attachments, and interviewed key officials to obtain additional information.

GAO's analysis shows that DHS has begun to take actions to implement four of the six recommendations made in the 2007 report; however, none of these recommendations have been fully implemented. GAO recognizes that DHS cannot fully implement some of the recommendations aimed at reducing the risk in accordance with best practices until the contract for the TASC program is awarded. DHS has taken, but not completed, actions to (1) define its financial management strategy and plan, (2) develop a comprehensive concept of operations, (3) incorporate disciplined processes, and (4) implement key human capital practices and plans for such a systems implementation effort. DHS has not taken the necessary actions on the remaining two recommendations, to standardize and reengineer business processes across the department, including applicable internal control, and to develop detailed consolidation and migration plans since DHS will not know the information necessary to develop these items until a contractor is selected. While some of the details of the department's standardization of business processes and migration plans depend on the selected new system, DHS would benefit from performing critical activities, such as performing a gap analysis and identifying all of its affected current business processes so that DHS can analyze how closely the proposed system will meet the department's needs.

GAO's analysis during this review also identified two issues that pose unnecessary risks to the TASC program--DHS's significant risks related to the reliance on contractors to define and implement the new system and the lack of independence of the contractor hired to perform the verification and validation (V&V) function for the TASC program. DHS plans to rely on the selected contractor to complete key process documents for the TASC program such as detailed documentation that governs activities such as requirements management, testing, data conversion, and quality assurance. The extent of DHS's reliance on contractors to define and implement key processes needed by the TASC program, without the necessary oversight mechanisms to ensure that the processes are properly defined and effectively implemented, could result in system efforts plagued with serious performance and management problems. Further, GAO identified that DHS's V&V contractor was not independent with regard to the TASC program. DHS management agreed that the V&V function should be performed by an entity that is technically, managerially, and financially independent of the organization in charge of the system development, acquisition, or both that it is assessing. Accordingly, DHS officials indicated that they have restructured the contract to address GAO's concerns by changing the organization that is responsible for managing the V&V function.

For more information, contact Kay Daly at (202) 512-9095 or Nabajyoti Barkakati at (202) 512-4499.

Status Legend:

More Info
  • 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 mitigate the risks of heavy reliance on contractors for acquiring and implementing an integrated departmentwide financial management system, the Secretary of Homeland Security should develop a human capital plan for the TASC program that identifies needed skills for the acquisition and implementation of the new system.

    Agency Affected: Department of Homeland Security

    Status: Closed - Not Implemented

    Comments: This recommendation has been closed as not implemented because DHS has cancelled its integrated departmentwide financial management system implementation project known as the Transformation and Systems Consolidation (TASC) program. The department is currently working on a new approach that will move DHS away from an enterprise-wide already integrated system toward a decentralized approach that prioritizes essential system modernization for Components with the most critical need.

    Recommendation: To mitigate the risks of heavy reliance on contractors for acquiring and implementing an integrated departmentwide financial management system, the Secretary of Homeland Security should establish contractor oversight mechanisms to monitor the TASC program. Such oversight mechanisms should emphasize the following critical element for guiding and implementing the TASC program: completion of migration plans, including consideration of existing financial management weaknesses, to determine the order in which the new system will be implemented in the components.

    Agency Affected: Department of Homeland Security

    Status: Closed - Not Implemented

    Comments: This recommendation has been closed as not implemented because DHS has cancelled its integrated departmentwide financial management system implementation project known as the Transformation and Systems Consolidation (TASC) program. The department is currently working on a new approach that will move DHS away from an enterprise-wide already integrated system toward a decentralized approach that prioritizes essential system modernization for Components with the most critical need.

    Recommendation: To mitigate the risks of heavy reliance on contractors for acquiring and implementing an integrated departmentwide financial management system, the Secretary of Homeland Security should establish contractor oversight mechanisms to monitor the TASC program. Such oversight mechanisms should emphasize the following critical element for guiding and implementing the TASC program: development and implementation of disciplined process plans, such as those for requirements management, data conversion and system interfaces, quality assurance, and testing to minimize the risks associated with systems acquisition and implementation efforts.

    Agency Affected: Department of Homeland Security

    Status: Closed - Not Implemented

    Comments: This recommendation has been closed as not implemented because DHS has cancelled its integrated departmentwide financial management system implementation project known as the Transformation and Systems Consolidation (TASC) program. The department is currently working on a new approach that will move DHS away from an enterprise-wide already integrated system toward a decentralized approach that prioritizes essential system modernization for Components with the most critical need.

    Recommendation: To mitigate the risks of heavy reliance on contractors for acquiring and implementing an integrated departmentwide financial management system, the Secretary of Homeland Security should establish contractor oversight mechanisms to monitor the TASC program. Such oversight mechanisms should emphasize the following critical element for guiding and implementing the TASC program: completion of the concept of operations to guide the acquisition and implementation of the integrated solution.

    Agency Affected: Department of Homeland Security

    Status: Closed - Not Implemented

    Comments: This recommendation has been closed as not implemented because DHS has cancelled its integrated departmentwide financial management system implementation project known as the Transformation and Systems Consolidation (TASC) program. The department is currently working on a new approach that will move DHS away from an enterprise-wide already integrated system toward a decentralized approach that prioritizes essential system modernization for Components with the most critical need.

    Recommendation: To mitigate the risks of heavy reliance on contractors for acquiring and implementing an integrated departmentwide financial management system, the Secretary of Homeland Security should identify the business processes needing standardization to facilitate implementation of the new system.

    Agency Affected: Department of Homeland Security

    Status: Closed - Not Implemented

    Comments: This recommendation has been closed as not implemented because DHS has cancelled its integrated departmentwide financial management system implementation project known as the Transformation and Systems Consolidation (TASC) program. The department is currently working on a new approach that will move DHS away from an enterprise-wide already integrated system toward a decentralized approach that prioritizes essential system modernization for Components with the most critical need.

    Recommendation: To mitigate the risks of heavy reliance on contractors for acquiring and implementing an integrated departmentwide financial management system, the Secretary of Homeland Security should direct the Resource Management Transformation Office (RMTO) to expedite the completion of the development of the TASC financial management strategy and plan so that the department is well positioned to move forward with an integrated solution.

    Agency Affected: Department of Homeland Security

    Status: Closed - Not Implemented

    Comments: This recommendation has been closed as not implemented because DHS has cancelled its integrated departmentwide financial management system implementation project known as the Transformation and Systems Consolidation (TASC) program. The department is currently working on a new approach that will move DHS away from an enterprise-wide already integrated system toward a decentralized approach that prioritizes essential system modernization for Components with the most critical need.

    Recommendation: To mitigate the risks of heavy reliance on contractors for acquiring and implementing an integrated departmentwide financial management system, the Secretary of Homeland Security should designate a Contracting Officer Technical Representative (COTR) for the independent verification and validation (IV&V) contractor that is not in RMTO, but at a higher level of departmental management, in order to achieve the independence needed for the verification and validation (V&V) function.

    Agency Affected: Department of Homeland Security

    Status: Closed - Implemented

    Comments: DHS agreed with our recommendation and noted in its agency comments that it had taken immediate action and subsequently provided documentation confirming that the new COTR was independent of the program management office.

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