Transcripts For CSPAN3 Veterans 20240705

Shortages . In. If i heard i think there are many questions embedded in there. Lets take one at a time. We put in place a policy to allow safe, nutritious formula to come into the country to make sure parents could find product on store shelves during the period of the national shortage. We had certain labelling requirements and they are primarily for things like safety. For example, a baby that has a cows milk aller by the were leaving this here you can watch it in its entirety if you go to our website. Live now to capitol hill where Veterans Affairs Department Officials will testify in their efforts to upgrade technology and improve Financial Management at the v. A. Live coverage here on c span. Good afternoon, the subcommittee will come to order. Were here today to review the vas progress in the transformational Business Program or fmbt. Its the vas third attempt to modernize the aging inadd watt financial and accounting systems. Material witnesses and deficiencies for decades. At the same time, the departments continues to be much similar to the wild west. Its been nearly ten years since the former va senior procurement executive blew the whistle for billions of dollars of unauthorized commitments. And nothing is fundamentally changing. With so many purchased cards and so many different facilities and no central tracking, the department is practically helpless to enforce its policies, much less root out waste and fraud. Basic function stretched the capabilities of the system, like maintaining records when the va transferred the cares and arp funds. When the committee asked basic questions about how the funding was handled during last months hearing, the va witnesses struggled to answer. Additionally, one witness showed contempt to members for even trying to perform our basic oversight duties. This situation is untenable and i appreciate that our Witnesses Today are attempting to solve it. Simply put, the fm bt program has to succeed. After a full start in 2016 and 2017, va relaunch the effort in 2018. Since then, the integrated financial and Acquisition Management systems have been implemented in the National Cemetery administration within the benefits administration, the office of information and technology, the office of the Inspector General, and part of the artifice of acquisition, lead just six, and construction. From the information we have, the system seems to be relatively successful in those offices. But theres still reason to be concerned. These organizations only add up to a few thousand users, and a small fraction of the vas budget. Implementing the eye phams and major organizations like the Veterans Health organization and the big spenders within the Veterans Benefits administration keeps getting pushed out and now is not scheduled for a rule out until 2024 and beyond. Meanwhile, the implementation costs continue to rise. Im not suggesting we have another ehrm here on our hands, and let me be clear, i believe most of the promises of the fmbt are sound, but this seems to be suffering from familiar problems like poor correlation between the various organizations within the va, struggles to fit commercial software, and extremely long schedules. Its been 3. 5 years since the fmct program. I think veterans and taxpayers are overdue for an update. I appreciate the witnesses with us today to help understand the challenges we face. I look forward to working deliver this system successfully. With that, i would yield Opening Statement time to Ranking Member sheila cherfilusmccormick. Thank, you mister chairman. First, i would like to say that im happy that we are having this hearing on and i. T. Modernization program that is so important to the future of va. As Inspector General has reported, the use of the aging Financial Management system has led to manual workarounds, which impedes vas and congresss ability to conduct oversight and spending. Va is the second Largest Federal Agency and relies on i. T. Infrastructure that is decades old. While we are all wear of the failures in Health Care Supply chain modernization, this program has largely gone unnoticed. This is a good thing. When the i. T. Program goes well, we usually dont hear about them. Unfortunately, this program is now experiencing delays. Given the importance of this program, this committee needs to understand the underlying issues. This program is foundational to creating not only financial efficiency for the department, but for accountability and oversight of congress. I hope to hear from our witnesses from va and the cgi federal today an honest account of how we can ensure the successful and Timely Development of ifams. I wont belabor the point i made every hearing weve had at the subcommittee this congress. Va obviously doesnt have the management infrastructure in place to coordinate and ensure the success of these large 18 modernization efforts. There are bills that have cosponsors that would at the very least start moving them in the right direction. I hope that we can start acting on these soon, here in the house. I demonetization is mandatory, not optional. It is in everyones interest to finally do this in a way that does not upset veterans and employees, and wastes billions of dollars. Commitment to management and standardization of processes across the department is essential to our future success. Thank you again, chairman. I look forward to hearing from our witnesses this morning. Thank you, Ranking Member. I will now introduce the witnesses on the first panel. I, the department of Veterans Affairs, we have miss teresa riffle, the Deputy Assistant secretary for Financial Management business transformation. We have mr. Charles tap, the chief Financial Officer for the Veterans Benefits administration, and mr. Daniel mcewen, deputy chief Information Officer for Software Product management at the office of information and technology. Next we have mr. Sydney gets, Senior Vice President for cgi federal. And finally, we have mr. Nic dahl, Deputy Assistant Inspector General for audits and evaluations at the office of Inspector General for the department of Veterans Affairs. If you would please rise and raise your right hand. Do you solemnly swear on penalty of perjury that the testimony you are about to provide us the truth, the whole truth, and nothing but the truth . Thank you. Let the record reflect that all witnesses have answered in the affirmative. Miss ripple, you are now recognized for five minutes to deliver your Opening Statement. Good afternoon, chairman rosendale, and all members of the subcommittee. Thank you for the opportunity to testify today and support of the department of Veterans Affairs, Financial Management, Business Transformation Program and its implementation of integrated financial and Acquisition Management systems. Im a come by daniel machine Software Product management in Veterans Benefits administration va cannot continue to rely on its legacy Financial Management system due to the enormous risk it presents to va operations. Its become increasingly difficult to support from a technical and functional abilities standpoint we cannot todays internal control standards. I am proud to report that ifams is no longer proof of concept, its successfully replacing the 19 80s era Financial Management system. Its been successfully up and running at va from almost three years, completing six successful deployments of ifams encompassing 4700 users across the enterprise. That includes the entirety of the National Cemetery administration, a portion of and several major staff offices. This includes the office of information and technology, the officer of the Inspector General. Ifams users have collectively processed over 4. 5 million transactions, representing almost ten billion in treasury disbursements. Ifams is stable, achieving over 99. 9 up time. On june 12th, 2023, va went live with its largest deployment to date, increasing the current user base by 60 . It was also the first time be a wet lifestyle train easily with both the finance and a physician components of ifams, which demonstrates that it is a viable solution capable of becoming the next generation financial and acquisition solution for va. Its important understand that ifams is not just a core accounting and acquisition system, it is crucial to transforming vas business processes and capabilities, so we can meet our goals and objectives, the complied with Financial Management legislation, and continue to successfully execute our mission to provide veterans with the health care and benefits they have earned and deserve. With so much at stake, both in terms of taxpayer dollars and the departments ability to serve veterans, it is vital that va accurately track and report how funds are used. Fortunately, ifams significantly improves Fund Tracking capabilities, which among other benefits, and shorts proper tracking expenditures. Through the use of ifams, va is increasing the transparency and accuracy of financial information. Va is gaining enhanced planning analysis and decisionmaking capabilities because of improved data integrity, reporting functionality, and business intelligence. Va is demonstrating these achievements through a range of metrics and associate targets based on industry best practices. Ifams process ninjas are part of the strategy to resolve longstanding Material Weaknesses and strengthen internal controls. For example, in contrast to our Current System, which cannot capture cringe action approvals, ifams routes documents to officials and allows supporting documentation to be attached directly to the transaction. Additionally, ifams requires additional levels of approval for high dollar transactions. Ifams also eliminates the need for an external tool to adjust injuries for Financial Reporting. Perhaps most importantly, ifams complies with reporting requirements from the office of management and budget, the department of the treasury, to capture various attributes and conform to the u. S. Standard general ledger. The ace Current System is unable to meet those requirements, which has led to extensive and inefficient manual workarounds and ifams will remediate all of these. Our success has been and continues to be built on partnerships. Mutual respect and to a collaboration with our users. Accordingly, ifams established a dedicated chief experience officer to coordinate user interaction and change management activities. East fmbt changed Management Practices placing heavy emphasis on continuous improvement, using Customer Feedback as and our own observations, findings, and industry best practices, establishing Lessons Learned during each way and incorporate those lessons into subsequent wave employments. Fmbt continues to stand budget despite changes. Our successes would not be possible without the ongoing support of congress, and we appreciate the opportunity today to discuss this important initiative. We will continue to work judiciously with veterans foremost in mind to modernize vas financial and Acquisition Management system and provide you with updates as we make further progress. Although we are encouraged by our success today, we are continually focused on the difficult work lying ahead, and are steadfast in our development through its successful conclusion. Chairman rosendale, Ranking Member sheila cherfilusmccormick, and some committee members, this includes my Opening Statement, i would be happy to answer any questions. Thank you. The written statement of will Teresa Riffel be added into the hearing record. Mr. Getz, you are recognized for five minutes. German rosendale, Ranking Member cherfilusmccormick, and other distinguished members of the subcommittee, thank you for the opportunity to appear today. My name is syd getz, Senior Vice President at cgi federal. For the last five years, ive served as the project manager on c. J. Federals contract with the va, with the Business Transformation Program known as fmbt. Had the subcommittees invitation, i am here to provide the required so underscore c. J. Federals ongoing commitment to the success of the vas fmbt program. In 2016, the va established the fmbt program to Core Management system, fms. In compliance with applicable regulatory requirements. To accomplish this complex modernization effort, the va selected cgi federal to deploy its momentum enterprise Resource Planning solution. Momentum, known ifams, is an omb improved Financial Management system that is operational at many federal government agencies. To mitigate program risk. The fmbt program is migrating users from the legacy system to ifams using an incremental deployment approach. Each deployment, or wave, delivers specifically could figured i fans capabilities to a defined set of the vas organization using an agile based implementation methodology. Today it, the fmbt program has completed six waves, deploying ifams to 4700 users at 20 different va offices. While there are still milestones and challenges ahead to be sure, ifams is delivering benefits to the user communities. These benefits include improved strategic and daily decisionmaking, processed automation, compliance with federal accounting regulations, maintaining clean audits, new regulatory requirements. A prime example of how its helping the va User Community is the power of its realtime Transaction Processing and on demand reporting. Today, can easily generate Standard Financial acquisitions and drill down into current accurate data on demand. This is because when transactions are entered in ifams, they are first verified to meet v. A. Standards. Then automatically update budgets in the general ledger in realtime. Ifams users also have the capability to refresh reports hourly, rather than daily. And, can run most reports at the enterprise level, administration level, or lower levels of the va administration. Before ifams, some similar reports took days to produce through a manual resource intensive spreadsheetbased process. As with other complex programs, success often depends on the stick holds focus on Key Performance factors. The same holds true here, are the teams focused on collaboration, transparency, enterprise wide standardization, continuous improvement, diligent change management, and execution of its risk based has kept the program moving forward. To illustrate this point, let me share how the team is maximized the value of formal user acceptance testing, also known as you a tea. In the first few waves, users performed hands on you a t towards the end of each wave. This is a common and standard approach. Lessons learned showed us weve improved user adoption by using the performative hands on functionality of ifams much earlier in each wave. So we refined the Program Implementation methodology, and applied this approach to the most recent place. By helping users gain and earlier appreciation of ifams, the team gained useful feedback in change management in training. It also has allowed us to identify and resolve issues earlier. Saving time and resources. I end this testimony where i began, by reiterating sea g. I. S federals unwavering commitment to collaborating with the fm beaty program, to deliver ifams to the entire v. A. User base for the benefit of our veterans. The written statement of mr. Getz will be entered into the written record. Mr. Dolly are now recognized for five minutes to deliver your Opening Statement. Chairman rosendale, Ranking Member sheila cherfilusmccormick, since 2015 the authors ofs Financial Statements has reported a Material Weakness due to Management Systems full implementation of ifams could help resolve this persistent Material Weakness and increase the transparency timeliness, accuracy, and reliability of information across v. A. In november of 2020. Prior modernization efforts failed, in part, because of poor planning and flawed execution. Combined with challenge aids transitioning from legacy systems. Decentralized oversight, unrealistic timelines, and adequate again schmidt of stakeholders and net users have plagued i. T. Projects. The resulting delays, changes in direction inventors, and user resistance all carry steep costs. The most recent audit of vas Financial Statements, the auditor found two significant deficiencies. The Material Weakness, most pertinent to this testimony focuses on the limited functionality of the Current System to meet vas Financial Management and reporting needs. Over time theyre antiquated Financial System has interior it id and no longer with meets increasingly stringent and omb. Deficiencies in vas Financial Management system are illustrated in findings we made related to vhs of covid19 funding. Generally, our three reports found va is compliant with reporting requirements. However, we identified concerns with the completeness, and accuracy of vas reporting. A major caution as va change reliance on several systems for payroll, and purchased transactions, requiring manual entries by staff, which increases the risk of reporting errors. The practice of manual expenditure transfers led to a lack of transparency and accountability over v. A. Purchases seen in our audit of v. A. s use of cares act fan funds. We found v. A. Staff not properly documenting the transfers, and in adequate this happened because of Financial Reporting systems limitations, and a lack of oversight that resulted in medical facilities staff on their own what constituted appropriate documentation. Additionally, staff did not follow basic controls like documenting purchasing authority, splitting duties between requesting and purchasing items, and verifying ordered goods where received. As a result, we reported an estimated 187 million in question costs. We felt early oversight of the ifams project was critical to help v. A. Achieve program goals. We initially issued to miranda. One detail that fm bts had not ensured the cia had four months after the initial i phams date. Requiring staff to fill engage in work around. The second for fmbt to consider addressing. In march 2023, our audit found fmbt as needed to do more work to fully address of streamlining processes and approving reliability with a focus on contracts converted in ifams, from the legacy contracts system. Our findings related to system functionality and procedures. And we made five recommendations to implement controls and processes to reduce risk and enhanced communication requirements, develop methodologys to prioritize user feedback, and include legacy systems converted contracts and system testing. We will soon begin the followup process on these recommendations. In summary, the transitions to ifams could mitigate the major issues in and improving v. A. Operations. These initial findings are Early Opportunities for improvement that may yield results for via as a continued implementing this complicated system. We urge v. A. To dedicate the resources to resolve issues and remain ready to identify the challenges that may arise in the months and years ahead. That concludes my statement. I will be happy to answer any questions you may have. Thank you mr. Dahl, the written statement of mr. Dahl will be entered into the hearing record. We now move and proceed to the questioning. I will recognize myself for five minutes. Miss as a chief Financial Officer, mr. Rachel ski, about a 714,000 dollar 235 714,235 dollar expenditure transfer, where the Medical Center could not produce any documents establishing an auditory because the person who prostate who had retired. The v. A. Has still not explain how much money was actually paid out, for what purpose, and who approved it. How would the ifams system prevent and resolve this type of situation. Thank you for that question. Ifams well resolve that. We have the ability now, for those customers that are in ifams to actually trace expenditures down to that level. So we are able to load the budget and actually reflect expenditures against it. I want to give one caveat to around payroll. I think in the response that v. A. Recently provided, we stated this as well. We do have to work with our interface partners, predominantly on the payroll side, to make sure that they are sending us the information to be able to trace it and recorded appropriately against the right account. So, the answer is yes sir, ifams will address this, 100 percent. As long as the proper information is entered in. Thats correct, sir. Jump in, junk out. Good information in, that information out. Struggles to manage its purchase card spending because employees at thousands of individual facilities made purchases, and that date on those purchases is fragmented. Can you explain why this is the case, now that i fans system would track that data . In ifams, the purchase card ability to purchase with a purchase card, is substantially different than what it is in legacy system today. So, we will see advanced immense in terms of traceability on what individuals are purchasing. I would also defer to away elsie, as i know im on a couple of subcommittees with them. They are making concerted efforts on reducing the use of the purchase card, and driving users to contracts or contracts are appropriate. But again, i would defer to them on more elaboration on that effort. That is underway. Thank you very much. In last months hearing, mr. Righteous cut tallied the law but you still had 4. 5 billion dollars in improper payments last year. Your annual purchase card spending is about five billion dollars. How much of that 3. 5 billion dollars represents purchase card spending, and with the eye pham system ever allow you to get that number down to, or at least near zero . Yes, ill have to take that particular question for the record, in terms of the amounts there. Okay. Mr. Dahl, your report on v. A. C. A. R. E. S. Act spending found that every single one of the 10,064 supply purchases and Service Contracts had some sort of procedural noncompliance. This lead your office questioning over 187 million of transactions. Most of which were made using purchase cards. Which of the v. A. s Current Systems process the purchase car transactions . What is wrong with them . And why is this such a big liability for Financial Management . I think the issue with the purchase card comes down to oversight. Purchase card, as youve mentioned, many purchase hard holders in v. A. That use their cards, without appropriate oversight from the purchase card accountable officials, you know, theres nothing thats going to stop people currently from using the purchase cards. Every cardholder has an accountable official. That should be reconciling their spending on a monthly basis, to make sure that the purchases are appropriate and supported. Is it that in your opinion, are the supervisors not given good guidance on what is acceptable and what isnt . And the processes, or are they not conveying that information down to their subordinates . I would say its likely a mix of both of those situations. Okay. Let mr. Mackinnon and miss understand the ifams system went live in the office of Technology Last week and all the purchase card transitions are not how is it that and what improvements hasnt made . Thank you for that question. Actually, i just talked with the oig a few minutes ago before this hearing, just to check in. See how things were going. Going very well. Again, the purchase card module within ifams this is substantially different than what they do with it cap today. So we are currently working with users to make sure that they understand those differences. I would tell you also that the reconciliation process, substantially different in ifams than what it is a legacy. So far, and again were only one weekend, that User Community. We have no issues that have been expressed or concerns from that group at this time. Very good. Thank you very much. I will now yield five minutes to representative cherfilusmccormick for her questions. Thank you mister chairman. As the office of Inspector General highlighted in the report last month, they need to modernize the need for modernization for v. A. s Financial System is imperative. Its the second Largest Agency with federal government enhanced to rely on a 30 year old system to manage billions of dollars it receives from the Congress Every year. But mr. Dahl, the limited functionality of the Financial Management system continues to be a Material Weakness ins Financial System audits. Can you explain the ramifications of not having a modern Financial Management system . Not only to your work but to the success of managing the funds of v. A. Well, without a modern system, v. A. Its very likely to continue to have a Material Weakness on the annual Financial Statement audit. Were going to continue to have to rely on manual processes, and interventions, to accomplish transactions. Certain transactions. They are going to be lacking the transparency and accountability over the use of funds. I would say those would be the key concerns. Now with the manual overrides, how do you catch any mistakes . Well, that would come down to, is there a supervisor checking on that . You know, frankly, im not sure that that is always happening. This of course of you doing, that theres always a risk of error. As mr. Rosendale said, garbage in, garbage out. Its probably more likely to happen when someone is having to manually process a transaction. So when we look at waste, do you feel like we have an adequate understanding of how much waste is going on without an Automated System that is fully functioning . It would be hard for me to characterize that. This system was conceived in the 19 80s. Its so far back in the past. Certainly people werent envisioning the current needs, the current environment. So, i think it would be a huge step forward to bring a modern system online. Thank you. Mr. Im sure youve heard about the manual workarounds weve required of not being able to use fms for the transfer of supplemental funds. Can you provide to the community some that puts on you as a cfo of the Veterans Benefit Administration . Yes maam, thank you for the question. So antiquated systems basically limits our ability to have strategic decisionmaking capability for us to be able to across the enterprise, be able to look at the resources weve been provided, to be able to make decisions on changes and priorities. And also make changes day today. Those certainly limit our ability. It also limits our ability to implement new legislation, and to provide the proper insights, in terms of whats been spent, and how quickly its been spent. Without using excel spreadsheets or other things that are off line. You certainly want to use your system of record to be able to capture that information. Since weve implemented ifams, we can certainly say for the general operating expense, weve been able to provide a more granular response when its been reporting on expenses we have in the b. A. The system is working as intended for the general operating expense. It has some limitations that we are glad that ifams will help resolve. In my past experience, i was the ceo of a health care company. It was extremely difficult to, i cant imagine doing manual override. To forecast expenses and also forecast what we are saving. How are you able to realistically forecast the next year of savings, and what youre actually losing, such as waste. That has been certainly a challenge with fms, because of how expensive the group is together made by a bunch of objects class, or a block. They are lumped together. Certainly ifams again allows us to be more dynamic in terms of seeing at a more granular level what we spent. And allows us to certainly do more analysis and look forward to using again, the granular details were able to pick in ifams. The transparency and level of granularity is certainly enhanced with ifams. Think. You mister chairman i yield back. Thank you very much mister representative. I yield five minutes to representative self. Thank you mister chairman. Mr. Dahl has used, has basically said people are involved in everything. I think thats fair summary. Miss riffel, are you getting pushback from the field on fielding this new system . Thanks for that question. Certainly, we are carrying a risk around change management from a Program Perspective overall. What i would tell you though, is that as we get more and more into v. A. , what we are starting to see is people really coming around, and being encouraged by what they see. So i think that, i wouldnt say were over by the hurdle by any means. Change is hard. But i will tell you that we are not seeing as much pushback as we were, if you were to ask me this question two years ago. Okay. Now i understand youve got about 4700 users out of a workforce, total workforce of 400,000. Thereabouts. So youve spent a billion dollars on one half of 1 of the users. Out of a budget of what, seven billion odd . So are you going to make the seven billion . Youve done, youve now have one half of 1 that youve rolled at the system out to. Yes, so actually, we are expected to have 124,910 users on the system at full deployment. Weve currently got, as we said, about 4700 on the system. What i will acknowledge is that obviously the h a is the Largest Organization weve yet to implement. I would also tell you thats by design. We want to make sure that we are addressing any improvements that we need to make with our deployment strategy before we tackle vha. And also, the complex programs that the b. A. Has remaining, those obviously would impact veterans in some way, if we dont do them correctly. So weve purposely established the schedule in the manner that we have. So we can ensure that we are learning from what weve already done. And by the time we get to vha, we will leverage all those improvement activities when we implement. So is there any chance that you are delayed systems, the b. A. , Loan Guarantee i can be move faster as you learn lessons . Or are you committed to your as late as 29 . Thanks for that question. What i would tell you is right now we just completed a threeday log in with vba on Loan Guarantee. Weve addressed the six items that were remaining to ensure that we are in agreement with vba on exactly how we are going to implement lg why. Bring the process of rebase lining that baseline right now. As soon as we finalize, that will actually address whether there is opportunity to accelerate or move other vba to the left after we finalized that rebaseline. Okay, very good. In your written testimony, you talked about the two g al reports, and the eight recommendations. So i pulled the most recent gao recaps of this program. You said that there was one remaining open, the gao currently references seven are open. And one is closed. As recently as february of 2023. They have at least three open with that date. Can you reconcile for me, your testimony with the gao updates . Yeah. I believe that those ill get back to you. Ill take that for the record. But we will reconcile that. It may be a timing issue on some of those. But we will make sure that weve got that reconciled for you sir. But again at least three of them, i can find a date of february 2023, they were still open according to the gao. I know that gao makes recommendations. But i still would like to see your response on your implementation of the gao recommendations. With that, mister chairman, i yield back. Thanks very much, representative self. Miss riffel you are getting near the midpoint of the fm beechy program. Many of the important milestones are being delayed will the cost estimate continues to rise. These are the concerns that i have when i start looking at some of the other Software Programs that weve invested in. I understand you did not initially include the operations cost for the life of the systems through 2047. But the implementation cost have also been increasing, from 2. 3 billion up to 4. 2 billion. Completion has slipped from 2028 to 2030, or later. Similar to representative selfs question, why is the implementation cost increasing, and can you guarantee me it will not go above that 4. 2 billion dollar mark . Thanks for that question. So currently, the projected life cycle cost estimate is at seven point 46, going out to 2047. Which is accounting for the useful life, as you indicated. What we will tell you is that based on the methodology that we are using to deploy, there will be instances, from time to time, where we find, for example, a new interface that wasnt originally identified. As you can imagine at v. A. We are doing constant modernization across the enterprise. We are going to have discovery from time to time. But i would tell you is that the way that we are structured in an agile fashion, its allowed us to continue to proceed, to actually move other ways forward. Or begin activity on a another wave, while we are pending getting more intel on a modernization interface. Or Something Like that. So although you are seeing some increases, what you are also seeing is our ability to flex with that. And to ebb and flow as those modernization efforts continue. I can tell you in v. A. , the size that it is, we will continue to have modernization that is happening simultaneously. And our program, the way we are structured, you have to be structured to be able to absorb that. And to be able to flex with it. Look, i understand. I really do. I understand as youre going through this process, you find, like you say, some enterprises and functions that nobody anticipated. Its sort of like doing a renovation on an old home. You pulled a wall of, you start finding additional things. Thats why all these jobs are based on typically time and materials. Okay. When you come to old construction. However, we are using tech payers funds. All im trying to do is establish some kind of a cap. Can you assure me that we are not going to go over that 4. 2 billion dollar range . Thats our life cycle cost estimate at this point in time, sir. Okay. So that would be an estimate. You cant guarantee that thats what we are going to finish a. Not guarantee that, no. Mr. Getz, the v. A. Has spent over one billion dollars on this project so far. How much of that has your Company Received . Approximately 440 million. Excuse me . 440 million since the inception of the contract in august, 2018. Mr. Getz, how much of the 7. 5 billion dollar life cycle cost, including implementing the system as well as maintaining it, does your company expect to get paid . Sir, ive not even thought about that. At the moment we are focused on just the implementation piece. So you havent run a life cycle cost estimate, to determine how much you should estimate . We have not. So how is it that the v. A. Has their estimate . If you arent included in that. I think that, i certainly would defer to miss riffel on this why what we look at is what is the cost implementation, plus the operations cost for whatever contract we have. At some point, the life cycle turns over to operations of maintenance. And then that is a different way of looking at those few things. Again, ive got the life cycle estimate. But they had to get those numbers from somewhere. Thats what im trying to figure out how much of it would be from you. They had to get some kind of estimate from you. I would defer to miss riffel, if i could, on that. Yeah, thanks for that. We have data that weve used, obviously from the implementations to date, so when you do a life cycle cost estimate, you are forecasting for the rest of that. Obviously, understanding what your implementation has been to date, based on size complexity of the wave. So that was a lot of the basis that was used in going into it. And certainly, weve got Program Costs related to the organization supporting the way. If youre forecasting. I understand the estimate, forecasting best information. How much of you plugged in for mr. Getz company then . Right, whats in front of you, i believe theyre sir, is the overall categories of cost that we have. So from a technology and Program Management perspective, its inclusive of a couple of the other contractors that are supporting some activity in that area. I would have to take for the record specifically what is out of that category, cgi. Okay, thank you very much. I will yield another five minutes to representative cherfilusmccormick. Thank you mister chairman. Miss riffel, with the task of executing a program of this size, its an incredible challenge. In itself, the dependency of this program to integrate to i. T. Modernization efforts that are currently not in existence, seems to me to be a recipe for failure. We know that this program has gone from needing to integrate with the hrm to now being required to interact with them autumn supply chain system that has suffered from years of delays. What are you, as the leader of fmbt, able to do to mitigate the risk of thank you for that. A couple things that weve done recently is that we have worked significantly with vha and with supply chain. In order for them fmbt to proceed with vha, understanding where the other initiatives are right now, we are proceeding with integrating with legacy supply chain. So as we move into vha, which obviously weve been working with vha, for the past two years, we are at the point now where we need to start really in earnest working on the implementation. Well implement with legacy. With ehrm, we have been coordinating with that office since its inception. They have all of our requirements, detailed requirements. Well continue to do that collaboration across the board. Then, as they continue to move out when they do, well be prepared for that integration. How confident that these medications that you just mentioned are going to be successful . For vha they will. It allows me to integrate with what is available right now, as im going to implement out of sight. And also understanding that when the enterprise supply Chain Solution becomes available, we will pivot and actually integrate with that future solution. We know we need to do it. But in the interim, we are going to integrate with what is available right now, so we can proceed. Do you feel that fmbt should be allowed to deploy across v. A. Without having to depend on successful the and the supply chain . I think what i just laid out, in terms of how were going to actually do be a future state for vha and the end state for vha once supply chain is known is a solid plan to allow us to proceed with fmct. Thank you, mr. Mackinnon, oh i t has the Impossible Task of law as well as whats included in ehrm, supply chain and oh hr modernization. And delivery of these programs. Thank you maam, for that question. Thank you for appreciating the complexity of managing three modernization efforts at the same time. I think solid project management process allows us to do this effectively. I look at number one, having clear business objectives. Number two, looking at solid risk and Issue Management process. I look at tight coordination with a customer, around change management. So by following these established a best practices in the project management. Were allowed to keep these projects moving at the same time. And who is ultimately responsible for the timing and coordination of these programs . Thats a joint responsibility. So in the case of fmbt, the business offices Office Management and accountability is the cfo. The in oit, we focus on the technology and the security of the system. So he is fed ram, a tio, and for tara processing, it falls under the ceo. Does oit have enough authority within v. A. To make significant changes to schedules of these programs to mitigate issues as they rise . Yes maam, we do. Given the tight coordination with our customer. I think were seeing that now as we build a wave schedule for fmct and now even oit is at the table helping build that schedule. Thank, you mister chairman, i yield back. Thank you very much representative. Representative self. I recognize you for an additional five minutes. I think ill yield for the time being, mister chairman, thank you. Mr. Getz, how are payments structured in your contract . A couple of different ways. There are parts of the contract that are and there are parts of the contract that our time and materials. Are you being paid for each implementation waves, or another method . Another method. We are being paid the wave implementation component of the contracts time and materials. Because of the, a lot of the uncertainty around that. So what we do is for each, the beginning of each fiscal year, prior to the beginning of each fiscal year, we work with a program to determine what the work has to be done in the next fiscal year. Agreed to that, provide an estimate, then we are paid on a time and material basis for our peace. Okay, so some of the most important waves have been delayed by multiple years. How is that affected your payments, if at all . Since they are all time and materials, again, those payments are determined by the work done in whatever the next disclosure is. So, weve got the estimates of what the rollout of this project is supposed to be. And yet, as weve been discussing, the smallest portion of them has been implemented. And we have the back end, okay, a lot more work that has much less to be done. How much has each inflammation wave work, and roughly what percentage is that of the contracts annual value . Sorry repeat the question. If its not being based on the wave, okay, its been based on estimates of time and material, and we have the total estimate of the cost of this project. And we know that this is getting to the crux of what is the eventual cost going to be. We see that not that many people are being served right now. Okay. Not that Many Services are being accounted for, right now. The back end is where the work is going to be piled up. And yet, a lot of this Contract Value has been burned up already. So, what im trying to get at, its how are we going to reconcile that . Well, again, when, i think miss riffel referred to the fact that theres some planning going on within vha and vba, to determine what the rest of the waves would look like. The order, the degree to which they would parallel. To combine, and once we have that, we will be able to provide a solid estimate on what the rest of the looks like. Im just having a really difficult time reconciling this. Because you are telling me you have estimates, and again, when a layman looks at this and sees that there is a very small percentage of this work that has been done, and the Contract Value, a lot of that has been utilized already, this is not reconciled. Let mr. Dahl, just the structure of this contract seem typical based on what youve seen elsewhere in v. A. Law . I personally dont have any teams that have been involved in looking at the contract. There is a team within the office of audits that is looking at the contracts. So i could take that for the record. I would really appreciate that. And do you believe it is sufficient to drive accountability . When they look at this contract, someone is going to need to report back to us, and let us understand, if it was structured in such a way as to provide accountability for the work that has been getting done, based upon the projected total cost of that project. I would not be in a position to answer that, sir. Okay. Miss riffel, youve already spent five years in more than one billion dollars to implement the ifams system in seven offices. I understand thist haa lot of sort of costs and fixed costs. For but this is an enormous amount of money to cover with just a few of the offices. Where is the money gone besides the implementation of the waves . Yes, so i think its important to understand what all it takes to actually implement a wave. So we have a large portion is going to project management contract, to help us make sure planning, the execution of the documentation surrounding project management, and how youre going to actually implement. We also have data converging, which is a huge effort for us. We do a number of mock conversions upfront for every wave, to make sure the accuracy, a set of, are a Development Effort in terms of Interface Development that is needed. So substantial cost. This is an inter prize solution, both acquisition and finance. So the cost is going to be significant to get it done. The other huge piece of the pmo contract is the organizational change management activities. Substantial work there. Weve been actually increasing some of the work there, based on Lessons Learned. Making sure that we get that user adoption as we need to. So, you know, to me, theres a lot going on to make sure we get it right. I agree with that. This is exactly the concern that i have, okay . As you go through and do all these conversions, and all these startup costs, with the smaller institutions, we are going to have to do those exact same things for the larger ones, are we not . Absolutely. So how is it then that you can tell me that you can sit here in front of this committee and not tell me that this estimate is going to be too low . Well, part of it is how we are estimating that future for the aj. We are talking about predominantly vha here. For vba, we have probably about 300 additional users. And we have a lot of activity do around interfaces for the remainder of vbas complex programs. For vha thats where a lot of the hard work is going to come in. Weve been working with vha for two and a half years now. We have a lot of information, and understanding about vha. Vha, a credit to them, has actually been working on data cleanse activities, which is substantial for data conversion for the past couple years. They continue to do that. Vha has worked on standardizing, theyre counting classification. Structure and were possible, looking at standardizing business processes. So a lot of work has gone into the b. A. , a lot of discoveries already known about vha, which has helped contribute to our estimates on what vha is going to look like. Again, still dont understand, you say there are larger institutions. We have to go through the conversions, we have to go through the start, of how that is going to cost last. And much, much smaller organizations that we already brought on. I am not reconciling that. Representative mccormick. Thank you mister chairman, as is often the case with technology, it is not the cause of these issues, many joke that when you have been to one va, you have been to one va. This organization had but he modernization because there is little to no standardization across the system. Has your staff begun efforts with vha to standardize work flows with using the new work flows across the country . Thank you for that question. Yeah, as i just mentioned weve actually been working with vha for the past couple of years. We have standardized their classifications structure at a certain level so that they will have visibility at an enterprise level. Theres a few uniqueness to vha, i would say. Some Medical Centers have injury activity, others have open heart surgery, so we are necessary, we will look to record and track costs of those specific organizations that are a little bit different. Otherwise, from an accounting perspective, a lot of it is very similar. They are looking at it from a standardization perspective there. That doesnt mean that the business processes are universal at each Medical Center. Change management at vha will be critical to make sure we meet the users where they are. How they operate at their Medical Center, what they do. Then we will work with them to make sure that we standardize as best we can their business processes, but we absolutely are standardizing their accounting track. Given the uniqueness of the va facilities. Has it been difficult to identify these practices . We havent gone out into vha earnest yet, but i can tell you that the a Senior Executive that is leading the effort for vha actually has field experience which i think is very good. Shes actually looking to do that standardization where it makes sense within vha. How long do you foresee that this process of identifying practices will take . Well, our intent is that we will address that in the first couple of pilots. So that we can make sure that we take the Lessons Learned from those pilots, and that we are prepared. At that point, can we accelerate vha at all . We need to get a couple of pirates under our belt. We are looking at full implementation. What is the rough timeline . Right now it is 2029. We actually have a sitdown schedule session with them coming up in the month of july. Based on the known direction now with supply chains. We will start to lay in the work a little bit more to fit in with vha now. What are the risks and successes of fmbt if they are not in medical Contracting Centers . Obviously, these are adoptions that are front and center for all of us. I would tell you that are upfront collaboration and transparency with the users, all the way from the Senior Executive down to the person from the receding is critical to being successful. Meeting people where they are, so i feel like our program is structured in a manner where we are geared for success in the way that we have approached the stage management, and i have been with v 8 37 years. I understand the really difficult change that they are understood. I think you need to make sure that they are heard and not just feel like it but that you are and you are listening to them making adjustments where you need to. I saw you nodding your head so i would like you to answer the same question. Order the risks if user adoption is not prioritized . The biggest risk is user adoption. I would definitely say that we are in the people business. We are people serving. It is so important that we keep our employees and users of the system at the center. As we implement it as a part of our user story, and we use it as a part of the testing, the most important thing is that we look point forward. Training isnt a one point event. We have to be engaged. For me particularly, around the adoption and implementation, and continuing to be a part of the culture, it is not a tool, it is part of our culture, it requires that i am personally engaged and reaching out to our User Community to understand that they have an advocate, and that there is somebody who will listen. We also have Great Partnership and will lose it with the team to continue to make the improvements we need to, so different generations of users can come on board and that they are able to use the system to be successful. Right now we have three generations of users, folks who are five years and less, people who are mid tier and some folks who have been working for two decades or longer. Each of them see the system differently. We have to make sure that we meet them all where they are from this perspective. Thank you so much mister chairman, i yield back. Thank you representative. I recognize you for five minutes. Thank you mister chairman. I am with the chairman, i just cannot make the figures work. What is your using as an estimate of inflation . Lets just start there. Yeah, so we certainly can give you the detail on the methodology behind the cost estimate. That will degrade your figures here. Is this scalable . Because it looks to me like the hoosiers that you gave us, youve got about less than 4 of your users, or currently you are on the system. If i am reading your charts, youve already used 25 taking out the operations and maintenance. So, i just dont know how you are going to get there. When i ask you a specific question, there is a huge percentage of your implementation and your development and implementation costs and project management. Breakdown, for me, your Development Costs and implementation costs, and we will get a bit more granular than your chart. How much is listed as procurement, training, infrastructure, organization, organizational change. Im just trying to get a handle on why there is such a huge percentage in Program Management. Thank you for that question. I can partially answer that some of the Program Management includes implementation costs within a particular category, as well as organizational change management. In the piece for technology, that is really the hardware and some of the licensing, and where appropriate, the Interface Development work there. So, that is where i can tell you the preponderance of the category of things that make up those cost components. I just question your life cycle, the way youve got it laid out. I just dont think that you have enough, and we will see if it is because you will have to get a whole lot more efficient as we move forward. A whole lot more efficient. The other thing that i would offer, which is part of the g. A. O. Audit, is that we have independent groups doing a cost, an independent life cycle cost for the program, and that will certainly inform us with what we have done ourselves on this cost estimate, and that is expected in the december timeframe. I will tell you in the summaries of these that we mentioned, the recommendations that we mentioned, the word metrics is scattered throughout many of them, so i think that goes back to what i am asking here, what are the metrics of moving forward that you are going to have to meet in order to meet your goals. So i look forward to that explanation. Mister chairman, i yield back. Separate from your fmbt project, va has attempted to pay us, and i understand that you need to integrate the system with an Inventory Management system, and you still dont know what the system is going to be. First of all, how long have you waited for this decision, and what problems has the uncertainty caused . Thank you for that question. As i indicated, weve been continuously working with vha, so understanding what the future supply Chain Solution was, there was still valid work we could do to move that particular implementation forward which we continue to do. In terms of the inventory package, because we will be implementing with legacy, at least right now and the beginning until the supply chain is known, we will integrate with the generic inventory package, which is part of the vista application in order for the facilities to maintain their levels, because we do not want to do any disruption to what happens today. Do you anticipate because of working with these other programs, and investment of time and energy that you are using, what is another decision that is made that you will have to go through all of the conversion, work, and everything again to have this duplication when the final decision is made . In terms of conversion for us, i certainly the supply chain will have to evaluate how they will be doing conversion activities. We would want to be in an alignment where theres independent seize on that data and we would certainly work towards that once they understand exactly where they are going. We have that accounted for and an understanding that once they get an enterprise solution and integration is known that we will move to that at that point. We understand that and we are going to continue to work in that direction. Okay on that same line, what capabilities do they lack that are supposed to be in the final state, and what do you need in order to proceed to that final state . I can respond as it relates to the solution. What we are doing is implementing the inherent momentum cuts, and functionality across the enterprise. There are two major components that are specifically supply chaindriven, that obviously we dont do. One is the catalog ordering capability, where they need to go in and determine what they are ordering at the catalog. The other is the inventory piece. The other components, if performing today, they will do. And again, we will work directly with, and we have commitment from the supply chain on our legacy, integrating with legacy. It is a slightly different group. But we will want to work in close coordination. Because obviously we are touching vha, it could impact patient care. Be mindful of that. How long have youve been waiting for the decision and what you are going to be dealing with for this system . For as particularly, and i do not want to speak for supply chains because i do not know how long they have been working with this effort. For us directly it has probably been close to two years and as i indicated, we continue to work with vha in the absence of understanding and what that would look like. I dont think that we have had significant ways to time. Weve continue to move that effort forward. Okay. Is this a technical problem or a lack of management . Sir, i appreciate the question. I think that i would defer to the supply Chain Program office. Im not sure that we have the right people to answer this question. Be happy to take that further. Please do. You cannot address a problem if you dont know what it is or who is responsible for the answer for it. That is why you should please help them check in. Your office wrote many reports of our problems with vas in the system called gip. What else does va need to improve the Inventory Management . The updated system is obviously overdue. It has kept an old system as well you know again, people are involved, and part of the issues that we see when we go out is people are not accurately tracking what they take or what they put into inventory. We have facilities where they are not using bar codes, they are ordering based on walking rather than relying on animated software. And ordering. So some of this stuff is just personal responsibility. People not taking the initiative to do what they are supposed to do and follow the process. I would say that is certainly part of it. Part of it could be the frustration with the system. That is the purpose. Thank you very much. Representative thank you mister chairman. What are the risks of va for not standardizing Management Practices . Well, i talked a little bit about continuing the weaknesses would be likely. They would still be doing manual work grounds for certain things. I would say it would have to look at it how the need was recognized to replace it weeks ago. And they are now working with that. I would say that if this system was not successful how much longer would it take in a modern system and how much financial resources, so im very hopeful that they are going to be successful. Because obviously, we are dealing with a system that is 40 years old. And it is not meeting the needs. It really is vital that va does all they can to get this system online. And i have another question in the same thing. What would it take for va to change their culture around modernization . Weve seen the issue from your report with compliance and practices. But i am assuming that there is an even larger issue to contribute to the lack of success for all ip modernization. I think that va is in a challenging situation. Theyve made a number of major systems all at once. I think it is an opportunity to improve coordination with the various aspects of the program being involved in these. I think the opportunities are a need for people to engage stakeholders and adequately define requirements. Come up with reliable and reasonable project schedules and estimates. I think it is important that they do systems testing. User feedback stays at the forefront and that they consider the concerns that they take the Lessons Learned from whatever system that they are currently working. Or any other system that was in the recent pass. Take those lessons and go forward with that. Could you please answer the same question. What would it take to change the culture . Thank you for the question. What we are finding is that all of these programs are not the same. They have the advantage of an early start and we are definitely looking at best practices from fmbt applying it to the other products. Im excited of what we are seeing on fmbt to date, and the early coordination and engineering that happens to make sure that we have the standardization and incremental releases, which has multiple things parallel. Those are all the best practices that we are seeing and we are applying those elsewhere as well. And how can the Systems Approach you and changing it . I think congress is supporting us and that and they would be certainly welcome for the ongoing support. Thank you so much. Representative self . Thank you mister chairman. My questions, i will turn to the 2022 fiscal year of 2022 audit findings, and there are ten findings here of the previous years findings. Of the ten, three have modified Material Weakness. These are financial audits. Two are significant deficiencies. Five are noncompliant. Those are the internal audits, i do believe, would you like to comment on these . But va has a number of challenges. Weve talked about the Financial Reporting systems. That is a Material Weakness. It is not likely to go away without upgrading and getting a system online. We are likely years away from that. Other Material Weaknesses involve information technology, security, and the need to work on the estimates for future liabilities. Those are the ones that the auditors are most concerned with. But you are right, we find the same, or almost the same thing year after year. And that is my point. How can you assure us that this time it will be different . The chicago cubs did that for 50 years. And the red sox did it for longer, unfortunately. I wish that i had a crystal ball to say that this is going to solve all of their problems. But it is not. It is just one piece. A significant piece but it is one piece having an easier time then getting a clean audit. Thank you, i yield back. I have one more question. According to your schedule the system will not be implemented and the majority of the Health Administration for another four years. It will not be in the disability compensation service, which spends more of the entire budget in 2029. When do you consider the project to have reached Critical Mass and demonstrate success. Thank you for that question. One of the things i would like to point out about the administration is that although we still have a guarantee and education and insurance left to do, we do have approximately 70 of their expected users in the system right now. So that, most of the work with these programs sort interface work, they have 100 users that will come on to support these programs, i just want to point out that for vba we have a large percentage of those users and the system. For vha, we are in the process of laying out what their schedule will actually look like, given the direction with the supply chain. I do believe that once we get a couple of pilots, and get Lessons Learned, making modifications we need to, we will look for opportunities in the future to accelerate that. I would say, i dont want to speak for charles, but i think as we baseline the schedule, we will work with them to accelerate the remainder of that work. Okay. Questions . Okay. I would like to thank all the witnesses for their testimony today and the panel is excused from the witness table. I will yield to the Ranking Member for your closing statement. Thank you chairman. I appreciate the testimony and answers from our witnesses this afternoon. I feel there is consensus on what we need to do to be successful. I do not want to see this program suffer the same fate as other programs. I feel like other management is capable of succeeding but i want to ensure that shes not burdened by the lack of success of other field programs. Employees, veterans, and members of congress have had enough and i look forward to working together to ensure that we have more positive outcomes in the future. Thank you, i yield back. Thank you. I want to thank the witnesses for joining us this afternoon. Congress has always prioritized health care and the size of the budget. 325 billion dollars. But it is inexcusable and irresponsible for the department to be managing that much money without accounting systems. The fmbt program has to succeed despite some significant bumps on the road. I do believe it can. We need to see the system rolled out to the key offices that handle the majority of the budget. This committee will be watching the improvements that have been promised and actually delivered. We will be monitoring whether this project is able to hit its timeline and recover its delays. I am committed to keeping it moving forward and not stumbling repeatedly like that system. No more projects can be committed to fail again and again, and continue to receive funding from the taxpayers. That is unacceptable. With that i ask the consent that there are five legislative days to revise and exclude include material. With no objection, the hearing is adjourned. Wednesday, the Justice Department former special counsel john durham, testified on his investigation of the fbi probe and links between the trump president ial cpaign and russian operaves. Mr. Durham released a report last month on his findings. You can watch the House Judiciary Committee hearing live at 9 am eastern on cspan 3. Cspan now, on free mobile video app, or online at cspan. Org. 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