Homeland Security financial management project in limbo

Homeland Security's chief financial officer is reevaluating options for integrating management data across the department and says he will settle on a game plan within the next two months.

Andrew Maner suspended BearingPoint Inc.'s work on eMerge2, a project to connect financial data across the department, in June to make sure he had the "right vision" for the integrated system. The delay isn't ideal, but is necessary to ensure that taxpayers' money is spent wisely, he said in an interview last week.

"We want to do this as quickly as possible," Maner said. "But what I won't do is rush this, and I won't just blindly let a contractor take me down a path."

Meanwhile, the Coast Guard is perfecting a financial management system that some argue could meet the department's needs. Completed in June 2003 for roughly $10 million and known as the Core Accounting System, it is built from three software pieces that Maner plans on delivering as part of the eMerge2 project: Oracle Federal Financials for accounting and reporting, Sunflower Assets for property management, and Prism for procurement.

"The real difference between the two programs is that the [Coast Guard's system] has been implemented successfully and now serves the needs of multiple agencies within DHS, while the eMerge2 program has stalled for the past year," said one observer who requested anonymity. The Transportation Security Administration and Federal Air Marshal Service within the Immigration and Customs Enforcement bureau moved to the Coast Guard system late last year.

Lawmakers and Homeland Security officials should consider further expanding the Coast Guard system "to agencies in need, like ICE, before expending even more resources on [eMerge2]," the observer said. ICE has shown interest in the Coast Guard's system, several department officials confirmed.

BearingPoint's September 2004 blanket purchase agreement to work as the prime contractor for eMerge2 is worth up to $229 million. Homeland Security will have paid the McLean, Va.-based consulting company about $10 million by the end of this year for site surveys, security and other preliminary work on the project, Maner said.

The department got "a lot of value" from that work, but needs to pause before implementing the departmentwide system, Maner said. "I don't think BearingPoint was performing up to the level it would have liked and I would have liked," he added, though he did not elaborate on the shortcomings.

"What I am trying to do is to deliver Oracle, Prism and Sunflower [software] to the organizations most in need," Maner said. The accounting, procurement and property management software also will be integrated so that data can be viewed across the department.

Maner said that within the next 60 days, he will have a "clearly articulated plan" for reaching those goals. There are several options for delivering the three basic software components departmentwide, he added.

The Coast Guard system has potential but isn't ready to be expanded, Maner said. "At the moment, I am very happy with the Coast Guard focusing on TSA and FAMS," he said. If they "get that right" and can "pull that off and perfect that over the next year, well, that's great. That should be their goal."

The Coast Guard's work will be done when it achieves a clean audit and has "good crisp financial systems," Maner said. "We have plenty to keep us busy with TSA and FAMS," said Capt. David Hill, chief of financial policy and systems for the Coast Guard, adding that internal controls also need to be strengthened.

"We have a good [accounting] system," Hill said. ICE evaluated the system earlier this year, he said. "That's pretty much a standard practice if someone's looking for a new financial management system," he said.

Hill declined to comment on the results of the ICE evaluation, or on the Coast Guard system's potential to replace eMerge2. "Our end result is that we want to have a good accounting system that meets our customers' needs," he said.

An ICE spokeswoman also declined repeated requests for comment, referring all questions about the bureau's financial system to the CFO's office. Maner said he is aware that ICE looked at the Coast Guard's system, but noted that the bureau, which continues to have problems balancing its accounts, isn't ready to transfer to any new system until it gets its financial data in better shape.

"If ICE believes [it] wants a new financial system, the department should get that for [it]," Maner said. The question is when ICE would make that switch, he said.

"When you move an organization that is as important to the mission as ICE-that has literally people out there that need money for guns, badges, wiretaps and things-you move them when you have a well-thought-out plan and financial data that is ready for a transition," Maner said. "We want to move them to a well-thought-out departmentwide solution."

As Maner arrives at a plan for that departmentwide solution, BearingPoint is preparing for more work on eMerge2. "We have some folks actively engaged in negotiating the third task order right now," said spokesman Steve Lunceford. "We anticipate that to be issued shortly."