White House slashes huge IT projects, more cuts coming

The White House on Wednesday announced more funding cuts to
technology projects meant to replace the accounting systems of federal
agencies.

Office of Management and Budget (OMB) acting director Jeffrey Zients
and Controller Danny Werfel said the White House plans to scrap or
reduce several projects as a result of its ongoing review of federal
financial management systems.

{mosads}Werfel said the White House is canceling a $113 million
project to replace the Small Business Administration’s loan management
and accounting system and scaling back two similar projects at the
Environmental Protection Agency (EPA) and the Department of Housing and
Urban Development (HUD).

The administration expects to save $224 million on the EPA and HUD
projects by cutting system features that aren’t mission-critical.

Those measures come in addition to the previously announced
cancellation of a modernization effort at the Department of Veterans
Affairs, which is expected to save a total of $423 million. Werfel said
the administration hopes to ultimately save roughly $1 billion a year by
canceling troubled or unnecessary information-technology projects.

Werfel stressed the need to allocate taxpayer dollars where they are
most needed. He said a re-evaluation by HUD and EPA found that their
existing accounting systems would suffice with some minor enhancements.

“[EPA and HUD] are no longer pursuing these more transformative
technology changes because the determination was made that their current
technology was serving them effectively and can be maintained,” Werfel
said.

Previous efforts to update federal accounting systems have been
plagued by delays and cost overruns due to the complexity and diversity
of the accounting methods used in the government. The White House halted
all modernization efforts in June to look for possible cost reductions.

Zients said the government needs to adopt a similar mindset to the private sector when it comes to IT development.

“[Prior to OMB] I spent all my time in the private sector and saw
that the best companies constantly evaluate and revise important IT
projects. Historically, most government agencies have not done this,”
Zients said. “We’re changing that and changing how the government does
business” by cutting projects that are behind schedule or over budget.

Zients said the OMB board of federal chief information officers and
chief financial officers is only halfway through its review of the IT
systems, so more cancellations are possible.

Werfel said agencies that do move forward with updates to their
financial systems will have to split them into manageable portions and
tackle them one at a time. He said agencies have tried to take on too
much in the past.

“We’ve faltered where we have tried to do more than what the
organization is capable of,” Werfel said. “We tried to change everything
all at once, standards and streamline the entire operation to deploy
new technology. That takes longer, drives up cost and drives up risk.”

Werfel said the new segmented approach should help agencies be better
stewards of taxpayer dollars. He said the goal is to conclude the
reviews by mid-October.

This story was posted at 11:52 a.m. and updated at 7:50 p.m.