Bloomberg News

Cost Overruns Stall U.S. Justice Department Financial System

June 02, 2011

(Adds software, hardware in fourth paragraph.)

June 2 (Bloomberg) -- The U.S. Justice Department scaled back plans to create a unified financial management system after delays and increased costs, according to a government report.

The original project, which was supposed to provide standardized financial management and procurement, was expected in 2002 to cost $357.2 million and take eight years to complete, the department’s inspector general said in a report released today. The department now plans to operate two financial management systems and expects to spend $851 million, the report said.

The scope of the plan “was significantly changed, with key aspects of the project either eliminated or reduced,” according to the report.

The department in 2001 sought to consolidate six financial systems into one by adopting new computer software, hardware and procedures. Financial management and the need for real-time information has been a top challenge facing the department for more than a decade, according to the report.

As of November 2010, the department spent $290.2 million with only two of its components -- the Drug Enforcement Administration and Bureau of Alcohol, Tobacco, Firearms and Explosives -- fully implemented, according to the report.

The inspector general’s report “understates the value of what has been accomplished and overstates the impact on the project vision,” according to a Justice Department response included with the report.

--Editors: Jim Rubin, Laurie Asseo.

To contact the reporter on this story: Justin Blum in Washington at jblum4@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net


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