VA Extends Financial System Overhaul by 5 Years—And Adds More than a Billion to the Cost

VA Extends Financial System Overhaul by 5 Years—And Adds More than a Billion to the Cost

A core IT modernization effort at the Veterans Affairs Department is billions of dollars over the original budget and the timeline for full deployment has been pushed out to 2030, officials told Congress Thursday.


While the agency’s multibillion-dollar effort to modernize its electronic health records system gets most of the attention, a joint hearing Thursday between the House Veterans Affairs Committee subcommittees on Technology Modernization and Oversight and Investigations focused on the agency’s financial management system.


The Financial Management Business Transformation, or FMBT, program kicked off in 2016 as a shared services project with the Agriculture Department. The agencies worked together to pen a contract to deploy the Momentum financial management system developed by CGI at an initial cost estimate of $887 million and timeline for full deployment by 2025. However, in December 2017, Agriculture pulled out of the deal, leaving VA to continue on its own.


Now, program cost estimates are upward of $2.5 billion and VA revised the schedule to put full deployment out past 2030.


Jon Rychalski, VA chief financial officer and assistant secretary for management, who worked as a contractor on the last failed financial management upgrade—CoreFLS in 2006—told Congress this could be seen as a blessing.


“FMBT arguably had its own rough start,” he told the subcommittees. “What began as a shared services partnership with the U.S. Department of Agriculture abruptly transitioned to a sole-VA effort when USDA pulled out of the deal. This might have been the best thing that happened to this program. We painstakingly built very close relationships with our business partners, both internal and external. I firmly believe we—the collective VA ‘we’—are best positioned to execute this implementation with strong business partners like CGI, Deloitte and ..