Chief information officer Roger Baker says the Veterans Affairs Department will design smaller projects instead of proceeding with its Integrated Financial Accounting System program. (Tom Brown / Staff file photo)
The Veterans Affairs Department is giving up on a plan to modernize its primary financial system after more than a decade of work and more than $300 million of spending.
VA will scrap its Integrated Financial Accounting System program (IFAS), on which it had planned to spend an additional $300 million, chief information officer Roger Baker said Tuesday.
Baker said VA will instead design smaller financial modernization projects that have a higher impact and a lower risk. He did not have an estimate on how much those projects will cost.
"This is a recognition that we can't do everything," Baker said. "We have limited resources, and we need to make sure we can be successful with the large projects we decide to move forward with."
Examples of more important projects include modernizing VA's systems for providing benefits and maintaining health records, Baker said.
VA previously spent about five years and $306 million developing a financial system called CoreFLS, which was terminated in 2005. The VA inspector general's office reported in September that the agency was making some of the same mistakes with its Financial and Logistics Integrated Technology Enterprise (FLITE) project, of which IFAS was a part.
Critical program functions were not fully staffed and program managers hadn't established proper oversight, the IG reported, among other problems.
Baker said VA had spent $16 million on IFAS, for planning costs. The agency had asked for bids to do some of the major work on the project, but had not awarded any contracts.
On June 28, the Obama administration announced that it would freeze spending on all large financial system modernization projects. FLITE was among 20 projects that the administration said last week would be reviewed.
Baker said VA and the Office of Management and Budget have been discussing the future of FLITE for months, and the announcement was not a direct result of the reviews announced in June.
Federal CIO Vivek Kundra praised VA's leadership for its "commitment to halt investments that don't produce results."
"We're not continuing a culture where we continue to throw good money after bad money," Kundra said.
Baker said a smaller component of FLITE, a strategic asset management system, would move forward. About $150 million in spending is still planned.