Legacy systems hinder Veterans Affairs’ DATA Act compliance, report says

The audit recommends that the VA keep a close eye on DATA Act compliance as it transitions to a modern shared service financial system.
The US Department of Veterans Affairs building is seen in Washington, DC, on July 22, 2019. (Photo by Alastair Pike / AFP)

The Department of Veterans Affairs’ decades old financial management system makes it all but impossible for the agency to fully comply with the financial reporting requirements of the DATA Act, a recently-released report states.

The audit, commissioned by the VA’s Office of the Inspector General and completed by CliftonLarsonAllen LLP in November 2016, was released publicly on Tuesday. In it, CLA identified the files that the DATA Act requires the VA to submit by the now-passed May 2017 deadline, and concluded that the VA would not be able to fully complete the task.

“VA’s Financial Management System (FMS) is VA’s core financial accounting system. It was implemented in 1992, and its technology has become obsolete over the decades, while at the same time Federal financial reporting requirements have become more demanding and complex,” the audit states. “Because of their age, legacy systems such as FMS are more cumbersome to operate and difficult to adapt to meet operational requirements.”

To get more specific, the DATA Act, which requires that federal agencies make spending data more available and accessible, set a May 2017 deadline for three types of files. These files detail expenditures in different areas, and the audit only expresses confidence in the VA’s ability to produce one of the three. The issue, the audit states, lies in the ways in which data is labeled and linked in the agency’s current financial management system. While this may sound like a small problem, it means that the VA’s current financial systems requires “extensive manipulations” to produce the data required by the DATA Act.


The good news is the VA recognizes the need to update its FMS. And instead of going it alone, the agency announced in October 2016 that it will begin using the Agriculture Department’s financial management IT service. “VA has allocated limited resources to DATA Act compliance as it is focusing its efforts on modernizing its financial system by transitioning to a shared service provider,” the audit states.

The report concludes with 17 recommendations, including that the VA acting assistant secretary for management “establish milestones to monitor VA’s system modernization efforts.” In a response to the results of the audit, dated May 2017, the VA agrees with the recommendations and states that many are already underway.

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