Transportation struggles with new financial software

The Transportation Department's new financial management software is a $26 million dud, according to a new report from the agency's Office of the Inspector General. In 1997, Transportation decided to replace its 1980s-era Departmental Accounting and Financial Management System with Oracle's Delphi system. The older system failed to comply with requirements set forth in the 1990 Chief Financial Officers Act, the 1996 Federal Financial Management Improvement Act and by the Joint Financial Management Improvement Program, a panel associated with the federal Chief Financial Officers Council. Those mandates require agencies to produce timely and reliable financial statements that comply with federal financial management systems requirements, federal accounting standards and the U.S. government standard general ledger. Transportation officials determined that the department's financial management technology was outdated and difficult to maintain, and that its system did not produce the financial information the agency needed. Transportation began using Oracle's Delphi software in a pilot program at the Federal Railroad Administration in April 2000. To date, Transportation has invested more than $26 million in the new program. Unfortunately, Delphi has significant "holes" that need to be plugged, according to Assistant Inspector General Alexis Stefani, who has recommended in a new report that a plan to expand the system in other agencies be shelved until Delphi is working correctly at the railroad organization. "While Delphi had been implemented in [the Federal Railroad Administration] for over a year, it still is not providing a full range of financial and reporting functions as intended," Stefani wrote. "Major deficiencies, which were encountered in [the Federal Railroad Administration], will present even greater challenges for [Transportation's] larger and more complex agencies." Stefani identified several weaknesses in the software, including inadequate internal controls and unreliable financial statements. Delphi also improperly credits recovered money from prior year appropriations to current year appropriations, a violation of the 1990 Anti-Deficiency Act, which prevents agencies from spending unavailable funds and obligating funds before appropriations are made by Congress. In addition to recommending that Transportation officials halt plans to install Delphi at its other agencies until the bugs can be worked out, Stephani also recommended that Transportation officials develop action plans with Oracle that include specific target dates for correcting the problems. In a July 27 memo, David Kleinberg, Transportation's former deputy chief financial officer, agreed with Stefani's recommendations. "Our mutual objective is to put in place a single, integrated, financial management system that brings credit to the Transportation Department," Kleinberg said. "We have established target dates and upgraded strategies with the contractor."