VA Financial Management System: Additional Actions Needed to Help Ensure Success of Future Deployments
Fast Facts
The VA's Financial Management System is 30 years old. It is extremely difficult to maintain and adapt to new requirements. VA is transitioning to a new system—estimated to cost $3.24 billion—and has begun to implement it at 2 VA organizations.
We found that VA has followed many leading practices for managing this change. For example, it has identified stakeholders and communicated effectively. However, we recommended (among other things) that VA improve how it measures progress, and that it ensure that its workforce has the skills and competencies to use this new system.
Highlights
What GAO Found
The Department of Veterans Affairs (VA) Financial Management Business Transformation (FMBT) program has begun deploying the Integrated Financial and Acquisition Management System (iFAMS) at the National Cemetery Administration (NCA) and the Veterans Benefits Administration (VBA). According to leading practices, management should measure the performance of a system and related user satisfaction to monitor progress toward preestablished targets in order to understand and report on expected operational benefits. The program has developed metrics, established baselines, and begun to measure operational benefits for NCA and VBA. However, it has not identified target values for achievement. Therefore, reporting of results does not provide a complete and measurable picture of the program's progress relative to plans. Until the FMBT program is able to compare results to target values, the new system's delivery of intended operational benefits and the extent to which the department is maximizing the return on its multibillion-dollar investment are unclear.
Effective change management techniques make successfully implementing organizational change quickly and with reduced risk more likely. The FMBT program's organizational change management activities were consistent with four leading practices and partially consistent with the remaining three (see table). Consistently following effective change management practices for the transition to iFAMS helps ensure a smooth transition for future deployments.
FMBT Program Consistency with Organizational Change Management Leading Practices
|
Leading practice |
GAO assessment |
|
Developing a vision for change |
Consistent |
|
Identifying stakeholders |
Consistent |
|
Effectively communicating with stakeholders to manage commitment |
Consistent |
|
Identifying and addressing stakeholders' potential barriers to change |
Consistent |
|
Increasing workforce skills and competencies |
Partially consistent |
|
Assessing the readiness for change |
Partially consistent |
|
Assessing the results of change |
Partially consistent |
Source: GAO analysis of Department of Veterans Affairs' Financial Management Business Transformation (FMBT) program documentation. | GAO-22-105059
The FMBT program's data conversion activities were consistent with leading practices for the NCA and VBA deployments. But the conversion timing caused issues for some users, including impacts to productivity and lengthy work-arounds. The program's independent verification and validation team previously recommended that the program be aware of potential risks to a midyear conversion and proactively mitigate these risks for NCA. However, officials accepted the risks and said conversions during the year are necessary if VA is to implement iFAMS throughout the department in a reasonable amount of time. The program has planned some actions to address issues users faced, but its risk and issue register does not include or address the conversion timing risks, such as user issues or those associated with the number and types of transactions and balances converted. Mitigating conversion timing risks and issues is especially important for future deployments, some of which are scheduled even later in the year and will impact more users.
Why GAO Did This Study
VA's core financial management system is approximately 30 years old and is extremely difficult to maintain and adapt to emerging requirements and federal financial regulations. VA's FMBT program is replacing its legacy system with a new integrated system, iFAMS, at an estimated cost of $3.24 billion. VA deployed the financial operations capabilities of iFAMS at NCA in November 2020 and at VBA in February 2021 and May 2021.
GAO was asked to review the progress of the FMBT program. The specific objectives for this report were to examine the extent to which (1) VA has measured if iFAMS is providing intended operational benefits; (2) VA's organizational change management activities facilitating its transition to the new financial management system were consistent with leading practices; and (3) VA's data migration activities to cleanse, convert, and migrate data to the new financial management system were consistent with leading practices. GAO compared key program management activities to leading practices and interviewed program officials, in addition to selected system users.
Recommendations
GAO is making six recommendations to VA, including that it establish target values for success metrics, ensure that organizational change management practices are consistent with leading practices, and mitigate the conversion timing risks and issues for future deployments. VA concurred with the recommendations and described actions the department will take to address them.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Veterans Affairs | The FMBT Deputy Assistant Secretary should establish target values for operational and customer experience metrics to allow the program to measure progress over time. (Recommendation 1) |
Open
In commenting on our draft report, VA officials concurred with the recommendation and described actions they planned to take. Specifically, VA stated the Financial Management Business Transformation (FMBT) program planned to coordinate with stakeholders for each wave to ensure that operational and customer experience metrics have baselines and targets established. In February 2023, VA provided support that it had established operational metrics and target values for the National Cemetery Administration Enterprise Acquisition and Office of Management waves. However, VA was in the process of developing target values for the Veterans Benefits Administration General Operating Expenses Wave and did not plan to establish target values for customer experience metrics. We will continue to monitor the department's progress towards implementing this recommendation.
|
| Department of Veterans Affairs | The FMBT Deputy Assistant Secretary should report metrics in relation to target values to help ensure that operational benefits are delivered as intended. (Recommendation 2) |
Open
In commenting on our draft report, VA officials concurred with the recommendation and described actions they planned to take. VA stated the Financial Management Business Transformation (FMBT) program planned to work with customer stakeholders to establish meaningful target values for each metric and report metrics against targets. As of February 2023, VA reported operational metrics and customer experience metrics for the first three waves. However, VA had not reported key metrics against targets and certain metrics indicated that the intended operational benefits of the program had not yet been delivered. We will continue to monitor the department's progress towards implementing this recommendation.
|
| Department of Veterans Affairs | The FMBT Deputy Assistant Secretary, in coordination with appropriate offices within VA, should facilitate the increase of workforce skills and competencies through user completion of core competency training. (Recommendation 3) |
Open
In commenting on our draft report, VA officials concurred with the recommendation and described some actions already taken. Specifically, the Financial Management Business Transformation (FMBT) program began tracking core competency (i.e., workforce development) training attendance as part of their Operational Readiness Criteria with established thresholds. As of February 2023, the FMBT program had taken steps to promote participation in workforce development training and had tracked participation in workforce development training, although participation in this training was not widespread for the program's third and fourth waves. The FMBT program is dependent on other offices within VA to increase participation in workforce development training. We will continue to monitor the department's progress towards implementing this recommendation.
|
| Department of Veterans Affairs | The FMBT Deputy Assistant Secretary should ensure that the FMBT program's organizational change management activities assess the readiness for change by conducting organizational change assessments as planned. (Recommendation 4) |
Open
In commenting on our draft report, VA officials concurred with the recommendation and described actions they planned to take. VA stated the Financial Management Business Transformation (FMBT) program planned to deploy the organizational change assessments as planned within the integrated project schedule. VA reported that it has conducted organizational change assessments as planned. We will continue to monitor the department's actions in response to this recommendation for additional deployment waves.
|
| Department of Veterans Affairs | The FMBT Deputy Assistant Secretary should ensure that the FMBT program's organizational change management activities adequately assess the results of change by following through on plans to align customer experience questions with organizational change assessments. (Recommendation 5) |
Open
In commenting on our draft report, VA officials concurred with the recommendation and described some actions already taken. The Financial Management Business Transformation (FMBT) program reported that it had revised the operational needs question in the organizational change assessment and use the updated question in the first organizational change assessment for the Veterans Benefits Administration General Operating Expenses wave. We will continue to monitor the department's actions in response to this recommendation for future deployment waves.
|
| Department of Veterans Affairs | The FMBT Deputy Assistant Secretary should include conversion timing risks and issues in the FMBT program's risk and issue register and mitigate the risks and issues for future deployments. (Recommendation 6) |
Closed – Implemented
VA officials concurred with this recommendation. In April 2022, VA included data conversion timing in its risk and issue register. VA indicated that the risk will be reviewed with the customer when planning for future incremental deployments to ensure the customer understands the inherent risks of converting data, the process in which data is converted, and the timing and impacts of conversion activity. If effectively implemented, these actions will help VA mitigate the risks and issues related to mid-to-late fiscal year conversions, particularly for future planned deployments that are more complex, affect a larger group of users, and are scheduled to occur later in the fiscal year.
|