In light of cost concerns, the U.S. Department of Veterans Affairs has canceled its $500 million Financial and Logistics Integrated Technology Enterprise program, a project that was created to revamp the department’s financial and management systems.
VA Chief Information Officer Roger Baker and Federal Chief Information Officer Vivek Kundra announced the cut of the program after the Office of Management and Budget issued a government-wide financial IT review, which required federal agencies to direct financial system modernizations in a manner that reduces project costs, aligns projects more closely to top priority business needs, accelerates deployments, and improves the performance of the systems once deployed, as stated in the memorandum.
“The huge amount of money needed for a financial management system did not compare favorably with other more pressing needs for IT dollars,” a VA spokeswoman said.
Canceling the financial component will result in savings of $80 million in the federal government’s 2010-2011 fiscal year. Almost 40 employees working on the FLITE program were reassigned to other projects.
While VA is pulling back the reins on FLITE, it will continue to develop the strategic management part of the program. The original purpose of the program was to create the Integrated Financial Accounting System, but the spokeswoman explained, “They were already seeing some problems with IFAS when OMB came out with their directive.”
At present, OMB anticipates approximately 30 financial system projects will be reviewed for consistency with the new policy.