VA Can't Comply with DATA Act Due to Outdated Systems
An audit conducted in November 2016 and publicly released earlier this month, determines that VA is unable to fully comply with DATA act mandates because of legacy financial systems.
At the direction of VA’s Office of Inspector General (OIG), an independent accounting firm, CliftonLarsonAllen LLP, performed a review of VA’s readiness to implement the Digital Accountability and Transparency Act of 2014 (DATA Act).
The DATA Act aims to make information on federal spending more easily accessible and transparent, with the goal of improving the ability of Americans to track and understand how the government is spending tax dollars. The act directs the Inspector General of each agency to perform reviews of spending data submitted by their respective agencies for publication on the website USAspending.gov.
The audit found “VA’s outdated systems and their limitations will prevent VA from fully complying with the DATA Act by the required May 2017 reporting date.”
At the time of the audit, VA projected that it would have the following compliance status:
- Compliant: Appropriations Account Detail
- Partially Compliant: Object Class and Program Activity Detail - VA will be challenged by some aspects
- Non-Compliant: Award Financial Detail
Hindering VA’s progress is its outdated financial system. The audit states,”VA’s Financial Management System (FMS) is VA’s core financial accounting system. It was implemented in 1992, and its technology has become obsolete over the decades, while at the same time federal financial reporting requirements have become more demanding and complex. Because of their age, legacy systems such as FMS are more cumbersome to operate and difficult to adapt to meet operational requirements. For example, FMS requires extensive manipulations, journal entries, manual processes, and reconciliations in order for VA to produce a set of auditable financial statements.”
Due to the age of FMS, VA cannot adapt the system to produce necessary file linkages, obligation information at the program activity and object class level, or procurement and grant awards data. Additionally, the reliability of data is questionable and there is no central repository for data submissions. Also, at the time of the audit, VA had not completed data inventories to include data elements and detailed crosswalks for them. Compounding matters, VA has limited resources allocated to DATA Act compliance.
VA is in the process of modernizing its financial system by moving to USDA’s financial management shared service. The new system will provide the needed data linkages. So, VA is not developing an interim solution for DATA Act compliance.
VA’s auditors recommended 17 corrective actions including establishing milestones for FMS modernization efforts, developing internal controls and standard operating procedures, ensuring complete reconciliations are performed, providing data storage resources, and supplying necessary resources to the VA DATA Act Project Management Office.
VA management concurred with all recommendations and provided implementation plans and targeted completion dates for each.
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