Assessments of CoreFLS

The department’s first attempt to replace its financial and asset  management systems, CoreFLS, began in 1998. The FLITE program includes two main projects to acquire the integrated  asset and financial management system: an asset management component,  referred to as the Strategic Asset Management (SAM) initiative, and the  financial management component, referred to as the Integrated Financial  Accounting System (IFAS). This 2-month schedule slip  was a consequence of the contractor falling behind in its efforts to perform  tasks and deliver products that are necessary to implement the pilot  system. Specifically, of the 34 tasks planned to be undertaken by mid- September, the contractor reported that 11 had not yet been started— including conducting a security assessment and predeployment testing— and that of 23 tasks that had been initiated, 16 were behind schedule. VA attributed the project being 2 months behind schedule to a shortage of  FLITE program office human capital resources and poor project  management by the contractor. A contract for the IFAS pilot is planned for  award in late October 2009. VA Has Recently Filled FLITE Program Staff Positions but Has Not Yet Fully Established Other Program Management Capabilities

VA has taken steps to institute effective management of the FLITE  program; however, the department has not yet fully established key  capabilities needed to ensure that system components will be  implemented as planned. Until VA completes efforts to develop and reconcile its cost  estimate; comply with EVM system standards; implement performance  measures for its schedule; include all relevant federal and system  requirements; and perform effective, independent verification and  validation, it will have increased risk that FLITE will experience cost  overruns and schedule delays and will not provide the capabilities that  users need. VA has not yet established a schedule for the program that is reliable. Program  officials recognize the importance of reconciling their cost estimate,  ensuring compliance with EVM system standards, establishing a reliable  schedule, ensuring all relevant federal and system requirements are  identified and traceable, and addressing all independent verification and  validation findings. Appendix I: Objectives, Scope, and Methodology

As requested, the objectives of our study were to (1) determine the status  of the Financial and Logistics Integrated Technology Enterprise’s (FLITE)  pilot system development and (2) evaluate key program management  processes, including the Department of Veterans Affairs’ (VA) efforts to  institute effective human capital management, develop a reliable program  cost estimate, use earned value management, establish a realistic program  schedule, employ effective requirements development and management,  and perform independent verification and validation. To evaluate key program management processes, we    compared program staffing plans with the program’s staffing resource  reports to determine the extent to which program human capital needs  have been met;   compared the program cost estimate and estimating activities to Office of  Management and Budget guidance and GAO’s Cost Estimating and  Assessment Guide to determine the estimate’s completeness and the  effectiveness of the estimating activities;  reviewed department documentation, such as the program’s plan for  earned value management implementation, and compared them to federal  policy and GAO’s Cost Estimating and Assessment Guide to determine  the department’s preparedness for conducting reliable earned value  management; reviewed the program schedule and compared it to planned activities,  deliverables, and practices described in GAO’s Cost Estimating and  Assessment Guide to assess the schedule’s reliability;    analyzed program documentation, including the department’s business  requirements, concept of operations for FLITE, traceability matrix, and  requirements management plan, to determine the extent to which they  reflect practices such as those recognized by SEI and include federal  financial management system requirements; and reviewed program documentation, such as the software quality assurance  plan, quality management plan, and technical review reports, to determine  the extent to which the program has addressed independent verification  and validation findings.
Why GAO Did This Study

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.

What GAO Found

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.