Reps. Question VA Timeline for Finance System Modernization

The Department of Veterans Affairs (VA) is in the early implementation stages of its rollout of the modernized, $2.5 billion Financial Management Business Transformation (FMBT) effort, but full implementation isn’t scheduled until 2030, prompting concern from members of Congress during a joint meeting of the House Veterans Affairs’ Subcommittee on Technology Modernization and Subcommittee on Oversight and Investigations on December 5.

“The fact of the matter is FMBT is one of the largest modernization efforts underway at VA, but is almost entirely slipped under the radar until now,” said Rep. Jack Bergman, R-Mich.

VA officials noted that FMBT comes amidst a slew of modernization efforts at the department, and with financial systems touching almost every part of the enterprise, implementation needs to be integrated with new systems. Chief among these initiatives are the new electronic health record system and adopting the Pentagon’s Defense Medical Logistics Support System, or DMLSS. With both of these primarily impacting the Veterans Health Administration (VHA), the largest component of VA, the FMBT program office opted to push full deployment for VHA back to 2030.

“An accounting system must be tightly linked to the logistics system to ensure ordering, deliveries and payments are seamless. Some of you may recall the debacle [during a previous modernization effort] when the accounting system, logistics system and users could not function together, and surgeries had to be canceled because the medical supplies were not available,” said Jon Rychalski, chief financial officer at the VA.

While VHA’s deployment is delayed, the VA plans to drive adoption at other agencies. The Veterans Benefits Administration will soon undergo its implementation, offering one of the big tests for the project, and the department is currently rolling out functionality at the National Cemetery Administration.

However, members of Congress noted that they wanted to see system adopted faster at VHA, the largest component of the department. Rep. Chris Pappas, R-Ill., noted his desire to see the timeline cut in half, and other members like Rep. Susie Lee, D-Nev., and Rep. Jack Bergman, R-Mich. echoed the sentiment.

Rychalski noted multiple times during the hearing that quicker adoption of the new system at VHA may be possible, but DMLSS is currently slated to be replaced by the cloud-based LogiCole system by 2023, requiring an additional implementation effort for the FMBT project, leading the team to push back VHA’s modernization.

“None of us working on this program are satisfied with a 10-year deployment,” said Rychalski. “The next year will be very telling with respect to accelerating our schedule. The electronic health record, DMLSS, and FMBT are all scheduled to be deployed in various locations for initial operating capabilities in 2020,” he added.

VA officials noted that while the 30-year old current system would likely not be able to add any functionality if mandated by law, it can continue operating for the time needed to modernize. However, the system lacks functionality and requires redundant administrative work with a risk of errors.

VA has had two past failed attempts to replace the system, leaving the department wary to fail again and Congress wary of VA’s efforts. However, VA officials expressed their optimism that they had the leadership buy-in, support from components, and administrative capacity to get it right.

“A lot of the lessons learned that we had around those prior efforts were about having contractors in charge. We have government IT people in charge of this program,” said Daniel McCune, executive director of the Enterprise Portfolio Management Office at VA.

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