Officials closely watching AID electronic finance system

Government officials are carefully watching the implementation of a worldwide, electronic financial-management system at the U.S. Agency for International Development, and agency officials say the effort is on track to meet its deadline for completion next year.

The effort to provide an immediate, integrated accounting system for AID missions worldwide is being funded on a multi-year basis. In the report for the bill to fund foreign operations in fiscal 2005, the House Appropriations Committee said it "remains intensely interested" in the rollout of the system, known as Phoenix.

The House bill, H.R. 4818, would provide $13.3 million for the program next year, while the Senate draft measure approved this week is silent on the project.

AID is among the federal entities to consistently score "red," or unsatisfactory, for its e-government operations since the Bush administration implemented the traffic-light grading system of the President's Management Agenda. For the latest scorecards issued in March and June, however, AID received "yellow" marks for "mixed results."

Arizona Republican Jim Kolbe, chairman of the House Appropriations Foreign Operations Subcommittee, has praised the agency for its progress in implementing the program and recently singled out its administrator for his efforts to improve AID's financial management. Kolbe cited last year's AID inspector general report on the system, which found for the first time that clean, unqualified audits could be performed on AID's fiscal 2003 financial statements.

No significant problems were found as a result of the audits, though the report said the agency "is not in substantial compliance" with federal standards.

The inspector general must submit this year's report by Nov. 15 to the White House Office of Management and Budget.

AID implemented Phoenix in Washington last year and successfully launched test projects in five of its missions in August. "This is one of the most successful implementations in the federal government," AID Chief Financial Officer Lisa Fiely said. It has stayed within budget and has rolled out with "few hitches," she added.

Fiely said the old system did not meet regulations and was inefficient. The system used in field offices still does not comply with regulations. The agency plans to deploy the technology to some 50 of its more than 70 missions by the end of 2005, she said. Other plans include merging the system with the State Department.

Fiely said AID cannot address one potential problem. In some developing countries, there may not be sufficient bandwidth, or communications capacity, for immediate updates from missions. In those countries, AID is looking for ways to bypass the problem, such as storing data until lines are freed. But Fiely noted that immediate knowledge of mission budgets is important to help identify overspending quickly.

Kolbe said agency managers do not have the ability to obtain "timely, reliable and complete financial and performance data on foreign-assistance programs on a consistent basis." He added, "We have miles to go before we can say this system was successfully rolled out to the field."