VA Testimony of William H. Campbell before Congress on March 22, 2004

United States Department of Veterans Affairs

STATEMENT OF
WILLIAM H. CAMPBELL
ASSISTANT SECRETARY FOR MANAGEMENT
DEPARTMENT OF VETERANS AFFAIRS
HEARING ON THE STATE OF HEALTH CARE AT THE
BAY PINES VA MEDICAL CENTER AND SURROUNDING FACILITIES
U.S. SENATE VETERANS' AFFAIRS COMMITTEE

March 22, 2004

Mr. Chairman and Members of the Committee, I appreciate the opportunity to appear before you today to discuss veterans’ health care in Florida. In my statement today, I will primarily address specific information related to The Department of Veterans Affairs’ Core Financial and Logistics System, known as CoreFLS and, on behalf of the Secretary, briefly provide a general statement related to the state of health care in VA.

VA Health Care

This year, and next if this budget is approved --- 800,000 more veterans will receive VA medical care than in 2001. This is a remarkable time for health care in VA. Never has quality of care been so good or the access so broad, and never before have we treated so many veterans at so many locations. Since 2001, our health care budget has increased 40% -- and on behalf of American’s veterans, I thank the members of the Committee for your contribution to this achievement.

For 2005, our total healthcare budget authority would increase 4.1% over 2004 and sustain the gains we have achieved over the last three years. If the President’s request is approved by Congress, we will have the resources we need to maintain our status as the gold standard of quality of care, and meet our goal of scheduling non-urgent primary care for 93% of veterans within 30 days… and 99% within 90 days of the desired date. It is the goal of the Secretary to eliminate, as a critical issue, our waiting list by the summer.

CoreFLS

I recognize that there are considerable concerns over the implementation of CoreFLS and its potential affects on medical care at the Bay Pines Medical Center. I share the concern, therefore I have been closely monitoring the progress of the implementation to ensure that each CoreFLS issue is fully addressed. Issues related to the system are being identified and each of these issues is being actively worked and corrected. Although implementation of the system at Bay Pines has been difficult, and there are lessons to be learned, I do believe that CoreFLS will be a system that will provide VA with timely, easily accessible financial and logistical information.

CoreFLS is an integrated commercial off-the-shelf software financial and logistics system solution that will be used by every financial and logistics office within VA Central Office, VHA, VBA, and NCA. While it is being developed to address material weaknesses and reportable conditions, CoreFLS will integrate the financial and logistics data into a single database and will allow accurate financial reporting and management review of centralized data. This initiative supports the President’s Management Agenda and the VA strategic goal to provide world-class service to veterans and their families through the effective management of people, technology, process improvement, and financial resources.

Once implemented, CoreFLS will be a fully-integrated system that will provide timely, easily accessible financial and logistical information. CoreFLS will provide better management data, automate data reconciliation, automate consolidated financial statements, and enable VA to comply with the Federal Financial Management Improvement Act and other statutory and regulatory requirements. It will also establish a foundation of business processes for the VA enterprise architecture, reduce the number of stovepipe legacy systems, and align with VA and Federal e-government initiatives.

CoreFLS will be used by approximately 1,000 VA sites, including medical centers, outpatient clinics, nursing homes, domiciliaries, counseling centers, regional offices, and national cemeteries. Eventually, it will replace VA’s existing Financial Management System, VHA’s Integrated Funds Distribution Control Point Activity Accounting and Procurement system, and Automated Engineering Management System/Medical Equipment Reporting System. In addition, CoreFLS will also interface with 74 specialized VA systems. CoreFLS will have an estimated 100,000 users and 15,000 concurrent users. The software will provide the following major functions: accounting, payments processing, receivables processing, debt management, asset management, billing, costing, financial analysis, budget, purchasing, contract management, and inventory management. Critical core activities will be the highest priority initially to expedite and maximize return on investment with no interruption to service.

Use of a “focus site” approach was determined by the project office and VA’s three operating administrations to be the best solution for the system development as the main emphasis of this phase is building and pilot testing the CoreFLS product at actual VA sites. Officials in VA’s operating administrations selected the focus sites, based upon specific criteria, and identified the VHA medical center at Bay Pines, FL, the VBA regional office at St. Louis, MO, and the NCA cemetery at Bushnell, FL (supported by the VHA medical center at Tampa). The focus sites are supported by VA’s Financial Services Center, and Austin Automation Center in Texas, and VA Central Office in Washington, DC, for enterprise-wide activity.

CoreFLS has completed the first Systems Development Phase, and as a result of the successful testing, VA leadership rendered a “Go – Decision to Proceed” with a continuation of Systems Development. This phase encompasses two stages of testing and additional system development. All components of the Systems Development phase have been incorporated and tailored within the CoreFLS products to meet the VA financial and logistics business needs and to meet the requirements for full implementation. After discussions with key VA Central Office leadership and stakeholders regarding potential Veterans Integrated Service Network (VISN) candidates for further testing, it was decided that VISN 8 (which includes VAMC Bay Pines), would serve as the best candidate for continued pilot testing of CoreFLS.

CoreFLS is currently in System Development Milestone II of the project life cycle, which began in July 2002. Although this phase was scheduled to end in July 2004, due to issues at Bay Pines, the phase is likely to be extended.

A comprehensive fallback plan was developed prior to implementation of pilot testing. There were lessons learned from the pilot, or Operational Test Phase 1, that were provided by key stakeholders. The lessons-learned recommendations were organized into seven topical areas: user provisioning, site readiness/communications, training, post-production support, help desk, finance, and logistics. CoreFLS has developed response time standards and continues to experience satisfactory performance. The transaction response time standard is 8 seconds, 90 percent of the time. The technical performance components of each user’s interaction with the applications included the amount of network time; the forms server (middle tier) response time; and the database processing time.

The CoreFLS staff is working closely with Bay Pines to resolve issues and resume normal business operations, so that the station can sufficiently support operations in this pilot test environment. Numerous issues have been identified however, as of March 17, 2004, 98.6% of these issues have been resolved.

Upon the completion of operational testing, the CoreFLS National Deployment Rollout Plan will provide the framework for transitioning the project from the development phase to the deployment phase. The plan will focus on the activities required to migrate a site to CoreFLS, including: migration of the current legacy systems, management of rollout sites, and detailed planning required for preparation of the cutover phase. Execution of this plan will be accomplished by utilizing a set of detailed tools such as Reports, Interfaces, Conversions, Extensions (RICE) dashboard, Deployment Rollout schedules, Site Readiness database, and Work Breakdown Structures. These tools will facilitate the rollup of the data into actionable, executive level information, while providing the necessary level of data to perform analysis.

Successful implementation of CoreFLS will reduce the number of independent, disparate systems, resulting in an overall improvement in financial stewardship in operations, maintenance and life cycle costs. Any external system not replaced in their entirety must be modified to comply with CoreFLS requirements.

CoreFLS is a commercial off-the-shelf product that was developed to track and control finances, vendor payouts and supply inventories. This system involves not just a change in technology but also a significant change in the way that its users will perform their jobs. We will intensely examine the lessons learned from this operational test and incorporate them into future system deployment methodologies.

From my own perspective, I believe that there are implementation problems for CoreFLS that need to be fixed. This includes better training and the need for better communication and change management from the management level down to the lowest end user level.

As directed by Secretary Principi, we will resolve the Bay Pines issues before we deploy CoreFLS to additional sites.

While there is concern that the selection of Bay Pines was inappropriate because it is one of our largest hospitals, the advantage is that such a site should allow us to identify and resolve most issues. Testing at a smaller facility would not have provided the level of complexity necessary to prove that the system will work for VA. As of March 17, 2004, 98.6% of identified issues (4,607) have been resolved, with only 1.4% remaining open (68).

Summary

The Office of Management will continue to work with VA users to successfully implement CoreFLS in order to provide VA with an integrated financial and logistics system. This system is critical to the successful, efficient delivery of service to our nation’s veterans and will allow VA to effectively manage the resources entrusted to us. Without CoreFLS, VA will not be able to remove the financial and security material weaknesses that currently exist.

While there have been problems with the system and legitimate concern raised over the selection of Bay Pines as the test site for this new integrated system, I believe that the system and the approach is sound, and as directed by the Secretary we will not rollout this system to other sites until we have remedied all critical issues identified at Bay Pines.

Thank you Mr. Chairman. That concludes my formal remarks. I will be glad to answer any questions the Committee Members may have.