Audit Report: DOE-OIG-19-03

You are here

October 31, 2018

The Department of Energy’s Funds Distribution System 2.0 

The Office of the Chief Financial Officer is responsible for maintaining and operating several key systems to manage the Department of Energy’s financial transactions.  The Funds Distribution System 2.0 (FDS 2.0) is one of these systems and provides for the receipt, control, and distribution of all obligational authority available to the Department.  Initially, the Funds Distribution Improvement Project was established in response to a need by the National Laboratory Directors Council to improve the speed and efficiency of the funds distribution process.  As part of this effort, FDS 2.0 was intended to improve the efficiency and effectiveness of the funds distribution process and be the single source of budgetary appropriations, apportionments, allotments, and allocations for the Office of the Chief Financial Officer’s Office of Budget, program and staff offices, and field offices.  Given its importance to the Department’s financial operations, we initiated this audit to determine whether FDS 2.0 was effectively developed and implemented and is meeting its goals and objectives. 

Although the system was placed into operation on October 1, 2016, we found that FDS 2.0 was not effectively developed and implemented.  In particular, we determined that the project significantly exceeded its estimated cost and schedule.  In addition, upon implementation, FDS 2.0 had not achieved several of its intended goals and objectives.  We also found that information related to the system’s development and implementation was not accurately reported to the Office of Management and Budget prior to operation, as required.  The Department also did not obtain approval of changes to the funds control regulations from the Office of Management and Budget.  Furthermore, Department officials had not ensured that critical project decisions were appropriately documented and that policies and procedures were updated to reflect process changes associated with the new information system.  

The issues identified occurred, in part, because Office of the Chief Financial Officer officials did not adhere to several key Department directives that could have helped enhance the effectiveness of FDS 2.0 development and implementation efforts.  We made several recommendations that, if fully implemented, should help the Department improve the management of FDS 2.0 and future information system implementation efforts.

Topic: Management & Administration