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Prudently, Mr. Norquist declared the project “dead” before spending an estimated $229 million on a system that would not provide the desired functionality or performance.

GAO has reported there are many long-standing problems that plague financial management system improvement efforts.

  • Is the Department not getting the message?

  • What needs to be done to get that message across?

  • How should the Department incorporate lessons learned to avoid

unnecessary spending on projects doomed to fail?

The consolidation of an entity as large and diverse as DHS poses significant management challenges, including integrating a myriad of redundant financial management systems and addressing existing and newly identified weaknesses in the inherited components. Our report3 noted that DHS had an inventory of over 500 financial management systems and had inherited 18 material internal control weaknesses4 from agencies that were transferred to DHS. In order for DHS to avoid unnecessary spending on failed projects like eMerge2, it must adopt solutions that reduce the risks associated with these efforts to acceptable levels. We have identified four key concepts that will be critical to DHS’s ability to successfully complete the implementation of an integrated financial management system. The four concepts are (1) developing a concept of operations document, (2) defining standard business practices, (3) developing an implementation or migration strategy, and (4) defining and effectively implementing disciplined processes necessary to properly manage the specific projects. Effective human capital management, such as strategic workforce planning and change management, is also identified as critical to successfully implementing a new financial management system. Our report provides specific recommendations aimed at helping DHS incorporate lessons learned and best practices.

In comments on the draft report, and at the hearing held on June 28, 2007, DHS officials indicated their willingness to adopt these recommendations and discussed the initiatives under way to do so. However, DHS’s financial management system integration effort is in the early stages, and continued focus and commitment, among other things, will be necessary for it to be successful.

2. The Department is required by law to prepare expenditure plans for information technology (IT) projects (such as United States Visitor and Immigration Status Indicator and Immigration and Customs Enforcement).

3GAO-07-536. 4The definition of a material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected.

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GAO-07-1157R DHS Posthearing Questions

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