Financial management systems in need of upgrade

Monday - 10/11/2010, 7:26pm EDT

Bob Tobias, director of public sector executive education, American University

Click to hear the interview.

Download mp3

Bob Tobias (photo courtesy
of American University)

Managers are being asked to "do more with less." Making smart choices requires a strong financial management system, but many agencies just don't have one in place.

"Many departments find it incredibly difficult because it's very expensive. By the time an agency gets all of its individual ... agencies in identifying what it needs and developing the IT project, the IT has made advances and then it's back to the drawing board," said Bob Tobias, director of public sector executive education at American University, in an interview with In Depth with Francis Rose.

When it comes to financial management systems, one of the biggest debated issues is whether or not to "start from scratch with a new fiscal year." One option for agencies is a financial management software package, but Tobias rejects using a software package, saying it does not solve the problem of transferring the agency's current data into the package.

The Office of Management and Budget requires five-year rolling budgets. Maintaining two separate systems and reconciling those systems every year "creates cost-efficiency and effectiveness problems," Tobias said.

An overhaul of financial systems is a tough sell to lawmakers, who take a "if it's not broken, don't fix it" stance, Tobias said. He added that Congress and the Obama administration are more concerned with creating public policy than maintaining and implementing those policies already created.

In order for the financial systems to be updated, a "confluence of events" have to happen, including credibility with Congress, the GAO and inspectors general about the need, cost and staffing to design and implement a program.

This all requires "a great deal of significant leadership time, energy and effort by political appointees who turn over pretty quickly," Tobias said.

Compounding this problem is the current budgetary standstill, with the federal government operating on a continuing resolution.

"It's an incredibly frustrating, debilitating, demoralizing approach to managing resources over an extended period of time," Tobias said.

"I think there's somewhere around a 50-50 chance that the lame duck Congress will pass all of the spending bills in one package. Other than that, my guess it's going to be March or April before the 2011 budget will pass, which means agencies will be operating five to six months on last year's funds," he said.