Financial Management:

Defining Requirements Is Crucial to System 90's Success

AFMD-90-85: Published: Sep 5, 1990. Publicly Released: Sep 5, 1990.

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GAO reviewed the Financial Management Service's (FMS) efforts to initiate and define requirements for a long-term strategy for modernizing and integrating its financial management activities, System 90, focusing on its first application, the Payments, Claims, and Enhanced Reconciliation (PACER) system.

GAO found that: (1) although FMS performed many of the analyses stipulated in federal system development guidance, it did not clearly define the system's capabilities or adequately analyze the related costs and benefits; (2) due to inadequate FMS cost-benefit analyses, there was limited information for determining which System 90 and PACER design aspects were likely to be most cost-beneficial; (3) FMS has not completed refining and clarifying PACER functional and internal control requirements; (4) in an effort to eliminate errors, omissions, or ambiguities in the documentation prior to contract award, a task force was analyzing various aspects of the PACER design; (5) FMS did not include System 90 or PACER in the Financial Management System's Five-Year Plan, as required; and (6) from fiscal year (FY) 1990 through FY 1994, FMS estimated that the System 90/PACER effort could cost about $55 million.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The project team held a series of meetings in December 1990 to identify and document detailed internal control objectives for PACER. For each of the eight PACER processes, the team identified threats, risks, control objectives, and proposed control techniques. The resulting document was provided to the System 90/PACER contractor in January 1991.

    Recommendation: To ensure that System 90 and PACER provide the capabilities that FMS needs in the most cost-beneficial manner, the Secretary of the Treasury should direct the System 90 project development team to complete its detailed definition of PACER functional and internal control requirements before beginning development of a detailed system design, including a comprehensive analysis of PACER internal control requirements based on a risk analysis and the development of detailed control objectives so that developers can identify appropriate control techniques and reviewers can assess the adequacy of those techniques.

    Agency Affected: Department of the Treasury

  2. Status: Closed - Implemented

    Comments: A new cost-benefit analysis was completed by a contractor in October 1992.

    Recommendation: To ensure that System 90 and PACER provide the capabilities that FMS needs in the most cost-beneficial manner, the Secretary of the Treasury should direct the System 90 project development team to revise and update its analysis of costs and benefits associated with System 90 and PACER in accordance with Federal Information Processing Standard 64 to determine how much PACER will cost the federal government as a whole and to determine which system capabilities will be the most valuable and, therefore, the most important to implement.

    Agency Affected: Department of the Treasury

  3. Status: Closed - Implemented

    Comments: At OMB request, Treasury included System 90/PACER in its July 1991 5-year plan.

    Recommendation: The Secretary of the Treasury should direct FMS to include System 90 in future 5-year plans, as required by Office of Management and Budget (OMB) Circular A-127.

    Agency Affected: Department of the Treasury

 

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