In recognition of their service to our country, the Department of Veterans Affairs (VA) provides medical care, benefits, social support, and lasting memorials to veterans and their families. It is the second-largest federal department with approximately 250,000 employees. In fiscal year 2008, VA reported incurring $97 billion in obligations for its overall operations. VA provides services to veterans and their families primarily through its three line administrations: The Veterans Health Administration operates a nationwide network of 154 hospitals, 995 outpatient clinics, 135 community living centers, 49 residential rehabilitation treatment programs, and 232 community-based counseling centers. The Veterans Benefits Administration provides assistance and benefits such as veterans’ compensation, survivors’ benefits, and employment assistance through 57 veterans’ benefits regional offices. The National Cemetery Administration manages 130 national cemeteries. To support its services to veterans and their families, VA relies on an assortment of business systems, including 13 different systems that currently support its asset and financial management. However, the department has long recognized that its business systems and processes are inefficient and do not effectively support the department’s mission. For example, according to the department, systems are not integrated, manual entry that involves labor-intensive accounting processes is business processes are not standardized, and processes and systems require multiple entry of business information and result in untimely financial reporting. Since fiscal year 1991, the department has reported on the need for an integrated financial management system and has reported financial management system functionality as a material weakness. This weakness continues to exist because many of VA’s systems are outdated, leading to inefficiencies in the reliable, timely, and consistent preparation, processing, and analysis of financial information for the department’s consolidated financial statements. To address this weakness and to improve stewardship and accountability over its resources, VA has for over a decade been pursuing improvements in its business processes and replacement of its existing financial and asset management systems with an integrated financial management system. The department’s first attempt to replace its financial and asset management systems, CoreFLS, began in 1998. The goal of this modernization effort was to develop a single system to integrate the many financial and asset management systems used across the department. VA had planned to complete CoreFLS in March 2006; however, it terminated development of the system in July 2004 after CoreFLS pilot tests determined it did not fully support the department’s operations and that the initiative suffered from significant project management weaknesses. According to VA’s Office of Inspector General (OIG), the department had obligated about $249 million of the $472 million that had been budgeted for the initiative by the time of its termination. Following the failed CoreFLS pilot tests, VA hired Carnegie Mellon University’s Software Engineering Institute (SEI) to perform an independent assessment of the project. In June 2004, SEI identified a number of management and technical deficiencies that had undermined the success of the initiative. SEI identified multiple findings related to problematic technical and functional execution, as well as poor management execution. Technical and functional problems included CoreFLS’s inability to perform essential financial management functions, security weaknesses, and usability. Management problems were identified in the areas of acquisition and program management, business process re- engineering, and transition planning. In addition, in August 2004, VA’s OIG reported multiple findings related to CoreFLS deployment, such as inadequate training, inability to monitor fiscal and acquisition operations, inaccurate data, and project management and security weaknesses. Further, in August 2007, VA’s Management Quality Assurance Service (MQAS) summarized findings from four CoreFLS reviews completed between August 2005 and August 2006. Among the findings, MQAS identified numerous fiscal and contract administration issues resulting from poor administrative internal controls such as improper reimbursements of task orders and travel expenses. Collectively, VA identified 141 findings related to problems with the CoreFLS initiative, which the department categorized into functional areas of responsibility such as acquisition management, organizational change management, program management, and systems engineering. In a subsequent effort to capture lessons learned and ensure that mistakes from CoreFLS would not be repeated in later initiatives, VA developed a repository, in which it aggregated the findings from the three independent reviews of the initiative. In September 2005, in a subsequent effort to replace its financial and asset management systems, VA began work on FLITE. In this regard, the department undertook activities related to planning and requirements development. For example, the department documented business requirements and business processes, initiated coordination for reporting and financial data warehouse development, conducted a market analysis of providers with the software and hosting capability to support VA’s existing financial management system, established key personnel requirements to provide program support and awarded a program support contract, and started developing numerous planning documents (e.g., program management plan, acquisition plan, and concept of operations). According to VA’s planning documents, FLITE is a multiyear development effort that is projected to deliver a fully operational system by 2014 at a total estimated cost of $608.7 million. The overall objectives of the FLITE program are to implement accessible and enterprise-level standardized business processes that result in increased efficiencies and enhanced internal controls; provide VA executives and managers with timely, transparent financial and asset management information to make and implement effective policy, management, stewardship, and program decisions; and provide business data and information in a secure, shareable, open, and efficient manner to facilitate a service-oriented atmosphere. The FLITE program includes two main projects to acquire the integrated asset and financial management system: an asset management component, referred to as the Strategic Asset Management (SAM) initiative, and the financial management component, referred to as the Integrated Financial Accounting System (IFAS). The program also includes a third project, to acquire a data warehouse that is intended to provide financial and logistics data reporting and analysis. SAM is intended to consolidate the asset and inventory management functions and the associated work management processes currently performed by multiple legacy applications into an advanced integrated system. It is to be the system of record for VA’s physical assets and perform asset and inventory management, real property management, information technology (IT) asset management, and work order and project management functions currently performed by multiple legacy applications. VA has chosen IBM’s Maximo Enterprise Asset Management software suite to implement these capabilities. IFAS is to be the financial, procurement, and accounting management component, and, together with SAM, is intended to replace VA’s legacy Financial Management System (FMS) and the Integrated Funds Distribution, Control Point Activity, Accounting, and Procurement (IFCAP) system. The data warehouse is projected to consolidate data from multiple transactional systems, primarily SAM and IFAS, for improved reporting, querying, and analysis capability. It is also intended to allow users to run larger and more complex queries and reports faster, without affecting the performance of the source systems. ce systems. Figure 1 shows a simplified view of the program’s components. Figure 1 shows a simplified view of the program’s components. The program is a collaborative effort between the Assistant Secretary for Information and Technology, who serves as VA’s Chief Information Officer, and the Assistant Secretary for Management, who serves as VA’s Chief Financial Officer. Various groups within VA have different roles and responsibilities for overseeing and managing programs. Figure 2 depicts the relationships between these oversight groups and the FLITE program. The roles and responsibilities of each oversight group are as follows: The VA Executive Board provides the Secretary of Veterans Affairs with a forum for discussing programs with senior leadership before decisions are made. The Strategic Management Council makes recommendations about programs to the VA Executive Board. The Programming and Long Term Issues Board focuses on long term multiyear program planning. The Budgeting and Near Term Issues Board is responsible for overseeing budget formulation and execution activities. The IT Leadership Board is responsible for adjudicating inter- and intraboard issues about programs that cannot be resolved between the Programming and Long Term Issues and Budgeting and Near Term Issues Boards. The FLITE Oversight Board is responsible for making decisions regarding FLITE business requirements, policies, and standards. The FLITE Program Office is responsible for overseeing and coordinating all aspects of the program. The office is responsible for performing these functions through the Program Director’s Office (PDO), which is responsible for business requirements and processes, and the IT Program Management Office (PMO), which is responsible for technical solutions. Project teams are responsible for managing SAM, IFAS, and the data warehouse. In addition, other VA organizations provide the office with quality assurance, acquisition, and technology support. These program- specific and VA supporting organizations are depicted in figure 3. Table 1 describes the components that comprise the program office and supporting VA organizations. VA is employing a multiphase approach for both the SAM and IFAS projects, which are to be implemented by contractors using commercial off-the-shelf systems. Specifically, these components are to be implemented through sequenced acquisitions and phased deployment and integration. The systems are planned to be implemented initially at pilot sites and subsequently refined and validated at beta sites before national deployment. The purpose of the pilot phase is to perform a final validation of the selected commercial off-the-shelf system and associated business processes in a production environment, gain experience in deploying the system, and obtain acceptance from the user community. The beta phase is to further hone the rollout capabilities by deploying the system to a limited number of sites that span the range of VA’s organizational environments. Following the beta phase, the department plans to incorporate lessons learned from both phases and produce a set of repeatable processes that can be employed during national deployment of the system. For SAM, the department’s plans include implementation at one pilot site and 15 beta sites. The SAM pilot contractor is to evaluate and analyze VA’s business processes and requirements for a fit with the Maximo software’s capabilities and produce updated business process documents based on the department’s needs. Also, the contractor is to train the users at the pilot site, as well as provide operations and maintenance and help desk services.