The Road to an Unqualified Audit Opinion: One Federal Agency's Story (2000)

is not very often that we hear of a federal agency installing a new integrated financial management information system and achieving an unqualified audit opinion all in the same year. The Office of Justice Programs (OJP) recently did both. grant-making agency, a component of the U.S. Department of Justice, oversees 40,000 grant awards, which translates into more than 3 million accounting transactions each year. In 1997 when Cynthia Schwimer became OJP's comptroller and chief financial officer, the system in place programmed to track 1,000 grants and about 100,000 annual accounting transactions. The called ATOMIC, programmed back in the 1970s, in the days of eight-track tapes and rotary phones. Clearly, the outdated, nonintegrated system holding the agency back and preventing it from achieving a clean audit opinion. blew up,' Schwimer said, adding that she quickly realized it time to look for a new system. It really important for us to see what options were available to make this happen. At first, the agency's staff looked at trying to refit the existing system by upgrading to ATOMIC 2000. Many staff members were deeply invested in ATOMIC and were reluctant to abandon it completely. With that in mind, Schwimer decided to bring in the experts at Thornton LLP to conduct an analysis of the situation. What they said was, 'Cut your losses, get rid of this system and purchase off the shelf,' she said. There were many stakeholders in the old system, said James McKay, deputy comptroller. It really helped us to have an outsider come in and say This isn't working.' OJP purchased an off the-shelf (OTS) product called Integrated Financial Management Information System (1FMIS) from Digital Systems Group Inc. (DSG). They bought five modules: funding, cost posting, accounts receivable, general ledger and disbursement. Having seen others fail to make their installation deadline by making too many up-front changes to OTS systems, OJP's strategy to implement the basic system. Very few changes were necessary to accommodate our immediate needs, Schwimer said. Her team installed the system within 90 days. The big test done on December 15,1998 when four modules were used to make a payment to a vendor. When that went off without a hitch, the OJP staff knew they had a winner. Schwimer believes the unqualified opinion on the audited financial statements finally happened in 1999 because of all the up-front work that done as the system installed. Grant Thornton and our staff completed a major reconciliation effort that reaped major rewards because we brought clean information into 1FMIS, she said. a first. No other federal agency has installed a new financial management system in 90 days and received a clean audit opinion in the same year. According to Schwimer though, the successful implementation and the unqualified audit opinion are only half the story. She is equally proud of how they did it. Her accountants and staff from Thornton and DSG worked side-by-side every step of the way to successfully implement the new system. At times, she said, it easy to lose track of who worked for whom since everyone on the same team with the same goals. She offers 10 pieces of advice that she believes made a difference for her organization. While some of them are quite simple, Schwimer said her tips are germane to managers taking on any enormous task: Establish an executive committee. In the case of OJP, Schwimer and the agency's chief information officer co-chaired the executive committee, which she said was made up of all the stakeholders who were committed to the success of this project. …