Federal Manager's Daily Report

“Outdated systems and their limitations” are hampering the VA’s compliance with the Digital Accountability and Transparency Act (DATA Act), an IG audit has said in a report illustrating a common challenge agencies face in trying to meet current data reporting standards with legacy systems.

The DATA Act seeks to make spending data more accessible, searchable, and reliable by expanding the requirements of the Federal Funding Accountability and Transparency Act of 2006, which requires reporting on contract, grant, loan, and other financial assistance awards of more than $25,000.

A report said that VA’s core accounting system, the Financial Management System, dates to 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. Because of their age, legacy systems such as FMS are more cumbersome to operate and difficult to adapt to meet operational requirements. For example, FMS requires extensive manipulations, journal entries, manual processes, and reconciliations in order for VA to produce a set of auditable financial statements.”

Further, the VA does not have an automated grants management system, it said, and procurement events cannot be linked to spending events in the financial system. Other issues include challenges in extracting data, limited quality control, questionable overall reliability of data where reconciliation is lacking, and the absence of a central repository for data submission.