Is extremely rare. But friends dont have to be. When youre connected, youre not alone. A house Veterans Affairsn. Subcommittee hears testimony about efforts to improve the va Financial Management. Officials from the Veterans Affairs department spoke specifically about the agencys Financial ManagementBusiness Transformation Program which is the third attempt to modernize its financial and Accounting Systems good afternoon. The subcommittee will come to order. We are here to review the progress in the Financial ManagementBusiness Transformation Program with efm bt, the vas third attempt toie modernize the hodgepodge of aging and adequate financial and Accounting Systems. The systems are a serious problem. Every year the va barely manages to pay the Financial Statement audit with a clean opinion despitefi carrying the same Material Weaknesses and deficiencies. At the same time the departments Spending Continues to be much similar to the wild west. Its been nearly ten years since the former senior procurement executive blew the whistle with billions of dollars of unauthorized commitments and nothing isea fundamentally changed. With so many purchase cards and so many different facilities and no central tracking the department is practically helpless to enforce its policies much less rule out the waste and fraud. Basic Financial Management functions stressed the capabilities of the systems like maintaining records when they transfer to the care and aarp funds. When the committee asked basic questions about how the funding was handled during the last month securing the va witnesses struggled to answer. Additionally one witness showed contempt to members for trying to perform the basic oversight duties. This situation is untenable and i would appreciate the Witnesses Today are attempting to solve it. Simply put, fm bt programs have succeeded after a false start in 2016y and 2017 they relaunched the effort in 2018. Since then the integrated financial Acquisition Management systems has been implemented in the National Cemetery administration a few offices within the Veterans Benefits administration, the office of information and technology, the office of the Inspector General and part of the office of acquisition logistics and construction. The information we have come of the system seems to be relatively successful in those offices but theres still reason to be concerned. These organizations only added to a few thousand users in a small fraction of the budget. Implementing the major organizations like the Veterans Health administration and big spenders into benefit administration keeps getting pushed out and now is not scheduled for a rollout until 2024 and beyond. Meanwhile the programs programs implementation costs continue to rise. Im not suggesting that we have another on our hands. Like poor coordination between the various organizations within the va, struggles to fit the operational practices with commercial software and extremely long schedules. Its been three and a half years since the subcommittee last examined the program. I think veterans and the taxpays are overdue for an update. I appreciate the witnesses joining us today to help us better understand the challenges that you face. I look forward to working through the difficulties deliver the systems successfully. With that i would yield Opening Statement time to the Ranking Member. Thank you mr. Chairman. First i would like to say that im happy we are having this hearing on the it Modernization Program that is so important to the future s of the va. As the Inspector General reported, the use of the Financial Management system has led to manual workarounds that impede the va and congress ability to conduct oversight. It relies on it infrastructure that is decadesold and while we are aware of the failures of the healthcare record and supply chain modernization this program has largely gone unnoticed. This isca a good thing. When a program goes well we usually dont hear about them. Unfortunately the program is experiencing delays. The committee needs to understand the underlining issue the program is foundational to creating not only financial efficiencies but the department for the accountability and oversight. I hope to hear from the witnesses and of the account of how we can ensure the Successful End of time development. I wont belabor the point that ive made out every hearing weve had in the subcommittee this congress. Uc they obviously do not have the management infrastructure in place to coordinate and ensure the success of the large modernization efforts. There are bills that have cosponsored that would at the very least start moving them in the right direction and i hope that we can start acting on these soon in the house. It modernization is mandatory, not optional. Ioits in everyones interest to finally do this in a way that doesnt upset veterans and employees and waste billionst f dollars. Commitment to the processes across the department is essential to the futures success. Thank you again and i look forward to hearing from the witnesses this morning. Thank you, Ranking Member. I will now introduce the witnesses on the first panel. First the department of Veterans Affairs we have the deputy chief Information Officer for Software Product management at the office of information and technology. Finally we have thege Inspector General for the audits and evaluations at the office of Inspector General for the department of Veterans Affairs. If you all will please rise and raise your right hand. Do you solemnly swear under penalty of perjury the testimony youre about to provide is the truth, the whole truth and nothing but the truth . Thank you and let the record reflect all witnesses have answered in the affirmative. You are recognized for five minutes to deliver your Opening Statement. Good afternoon all members of the subcommittee. Thank you for the opportunity to testify today in support of the department of Veterans Affairs financial Transformation Program and its implementation of the integrated financial acquisitin Management Systems. Imar accompanied by the deputy chief Information Officer for Software Product management and the chief Financial Officer of the Veterans Administration. The va shouldnt continue to rely on its legacy financialpr Management System due to the enormous risk it presents to the operations. Its becoming increasingly difficult to support from the ability standpoint to not tocorrect new audit findings ani its not compliant with todays internal control standards. Im proud to report its no longer proof of concept it is a successfully replacing the antiquated 1980s era Management Systems. The va completed deployments encompassing 20 offices and 4700 users across the enterprise and that includes the entirety of the National Administration a portion of the Veterans Administration and several major staff offices including the office of information and technology and Inspector General. Of the users collectively processed over 3. 5 million transactions representing almost 10 million in the treasury disbursements. Achieving over 99. 9 of the time on june 12, 2023 the va went to live with its largest deployment to date increasing the current user base pay 60 . It was also the first time they went to live with the finance and acquisition components which demonstrates the viable solution capable of becoming the next generation financial acquisition solution. Its important to understand its not just a new accounting and acquisition system. Its crucial to transforming the business processes and capabilities so we can meet our goals and objectives and compliance with Financial Management legislation and continue to execute the mission to provide veterans with the healthcare and benefits theyve earned and deserved with so much at stake both in terms of taxpayer dollars and the departments ability to serve veterans it is vital that they accurately track and report how the funds are used. Among many other benefits help a ensure the proper tracking. With the timeliness and reliability of the Financial Information the va is gaining planning analysis and decisionmaking capabilities because of improved data integrity reporting functionality and intelligence. F the associated targets based on industry best practices. The process changes are a part of the strategy to resolve longstanding financial weaknesses and strengthen internal control. In contrast to the system that cannot capture the transaction approval the documents to improve in the lab supporting documentation to be attached to the transaction for the high dollar transaction they also eliminate the need for the external tool for the Financial Reporting. Perhaps most importantly they comply with reporting requirements from the office of management and budget at the department of the treasury to capture the attributes and conform to the standard general ledger. The Current System is unable to meet those requirementss which led to extensive and inefficient workarounds. Accordingly theyve established a dedicated toes chief experiene officer to coordinate the user interaction to change management activityc. Reestablished Lessons Learned reestablish Lessons Learned and deployment. They continue to stay on budget despite the changes and the successes wouldnt be possible without the ongoing support of congress and we appreciate the opportunity today to discusses this important initiative. We work with veterans foremostng in mind to modernize the financial acquisition managemens system and provide you with updates as you may further progress. We are focused on the work that lies ahead in the steadfast commitment to see this initiative through. This concludes my Opening Statement and i would be happy to answer any questions. The written statementai wille entered into the hearing record. You are now recognized to deliver your Opening Statement. Other distinguished members of the subcommittee thank you for the opportunity to appear today. I am a Senior Vice President of cgi federal. For the last five years i served as a project manager on the federals contract for the Financial ManagementBusiness Transformation Program known as fm bt. The subcommittees invitation im here today to provide the requested status update and underscore the federal ongoing commitments to the success of the program. As you knowui in 2016 the va established the program and Financial Management system. In compliance with applicable regulatory requirements to accomplish this complex modernization effort they select a cgi federal to deploy its momentum enterprise Resource Planning solutions. Momentum known in the va as the integrated financial Land AcquisitionsManagement System is an approved Financial Management system that is operational with many federal government agencies. To mitigate the program risk the program is migrating from the financial acquisition system using an incremental deployment approach and each deployment delivers specifically configured capabilities to the defiant set of organizations. The program has completed six waves deploying them to 4700 users at 20 different offices. While there are still milestones and challenges that had to be sure, theyve already delivered benefits to the finance and acquisition User Community and accommodating new regulatory requirements. A prime example the realtime Transaction Processing and today the users can easily generatemm the financial acquisition reports and drill down into the current accurate data on demand. This is because when transactions are entered they are first verified to meet the standards and automatically update in the ledger inon real time. They also have the capability to refresh reports hourly rather than daily and can run most reports of the Administration Level or other levels of the organization. Some similar reports took days to report over the resource intensive spreadsheet processes. As with other complex programs, theep success often depends on e focus on the Key Performance factors. The same holds true where the teams focus on collaboration and transparency enterprise standardization continuous improvement, diligent change management and execution of the riskbased approach with the program moving forward. To illustrate this point, let me share how the team has maximized the value of the user acceptance. In the first its towards the end of each wave. Tithis is a common and standard approach. Lessons learned taught us we improve the user adoption by having them perform handson testing of the functionality business processes much earlier in each wave, so we are flying to Program Implementation methodologies and apply this approach to the most recent wave. By helping gainingso an early appreciation theylo gain useful feedback to the management and training. It also allowed us to identify and resolve issues earlier saving both time and resources. I. E. End of the testimony where i began by reiterating the unwavering commitment to collaborate with the program to deliver theg entire user base fr the veterans. I look forward to answering your question. The written statement will be entered into the record. You are now recognized to deliver your Opening Statement. Chairman, Ranking Member and subcommittee members, thank youn for the opportunity to discuss the oversight of the va financial oversight management atchallenges. Since 2015 the audit of the Financial Statement has reported a Material Weakness due to problematic Financial Management systems. Full implementation could help resolve this Material Weakness and increase the transparency, accuracy, timeliness and reliabilitypl of Financial Information across the va. Accordingly we began oversight of the implementation shortly after in november of 2020. The prior modernization efforts fell in part because of poor planning and flawed execution combined with challenges, transitioning from the legacy systems. The decentralized oversightaw unrealistic timelines and adequate engagement of stakeholders and end users and minimal testing have plagued the projects. The resulting delays, changes interaction and user resistance carries deep costs. In the most recent Financial Statements the auditor found three Material Weaknesses into two significant deficiencies. The Material Weakness most pertinent to this testimony focuses on the limited functionality of theia Current System to meet the Financial Management reporting needs. Over time the vas complex andy antiquated Financial System has deteriorated and no longer meets the increasingly stringent requirements mandated in the treasury department. D deficiencies in the Financial Management systems areer illustrated in findings be made related to the funding which showed they lacked those as intended. The three reports found for thecomplying with reporting requirements however we identify concerns with a completeness ans and accuracy of the va reporting. Of the major cause for this is the reliance on several systems for payroll and purchase Card Transactions acquiring