Exhibit 300 (BY2009) for HHS Unified Financial Management System

1. Date of Submission:

2008-02-04

2. Agency:

009

3. Bureau:

00

4. Name of this Capital Asset:

HHS Unified Financial Management System

5. Unique Project Identifier:

009-00-01-01-01-0001-00

6. What kind of investment will this be in FY2009?

Mixed Life Cycle

7. What was the first budget year this investment was submitted to OMB?

FY2003

8. Provide a brief summary and justification for this investment, including a brief description of how this closes in part or in whole an identified agency performance gap.

HHS relies on multiple, independent legacy accounting systems to meet its financial management needs. In addition, component agencies maintain a number of systems that give some level of financial management functionality. These systems provide information to the core financial system of record through a series of automated and manual interfaces. Previous analysis identified at least 107 different systems with 119 interfaces and 15 manual data entry processes--the level of interface complexity at each agency varies. Financial management functions are decentralized and some activities, such as reporting, require significant manual processes to produce accurate financial management information. The Unified Financial Management System (UFMS) is a business transformation effort, designed to integrate department-wide financial management systems and operations by aligning the Department's businesses with modern technological capabilities. UFMS replaces five legacy financial systems with one modern accounting system. UFMS uses Oracle Federal Financials, a web-based COTS product to satisfy three categories of financial management systems requirements mandated by FFMIA. In addition, the UFMS investment helps HHS achieve the following strategic objectives: -Eliminate redundant and outdated financial systems -Produce accurate, timely, reliable, and relevant financial information to help HHS managers make fact-based operational decisions -Comply with applicable federal financial management system requirements -Strengthen internal controls by standardardizing business rules, data requirements and accounting policies across HHS -Streamline operational activities to achieve more efficiency and cost-effective business performance -Continue to achieve unqualified audit opinions on annual financial statements The HHS ITIRB approved the business need for UFMS in June 2002 and approved its subsequent business case in November 2002 closing the CPIC Select Phase for UFMS. Since, UFMS has been successfully deployed across all HHS component agencies with the exception of NIH and CMS, which are outside the scope of the investment. In 2005 HHS deployed UFMS at CDC and FDA. In 2006, HHS deployed UFMS at PSC and PSC-serviced agencies and in October 2007, at Indian Health Service, completing the UFMS implementation. UFMS entered full steady state in January 2008.

9. Did the Agency's Executive/Investment Committee approve this request?

yes

9.a. If "yes," what was the date of this approval?

2007-06-26

10. Did the Project Manager review this Exhibit?

yes

11.a. What is the current FAC-P/PM certification level of the project/program manager?

Senior/Expert-level

12. Has the agency developed and/or promoted cost effective, energy-efficient and environmentally sustainable techniques or practices for this project.

no

12.a. Will this investment include electronic assets (including computers)?

yes

12.b. Is this investment for new construction or major retrofit of a Federal building or facility? (answer applicable to non-IT assets only)

no

13. Does this investment directly support one of the PMA initiatives?

yes

If yes, select the initiatives that apply:

Initiative Name
Expanded E-Government
Financial Performance

13.a. Briefly and specifically describe for each selected how this asset directly supports the identified initiative(s)? (e.g. If E-Gov is selected, is it an approved shared service provider or the managing partner?)

UFMS automates internal processes, minimizes redundancy, standardizes business processes and maximizes interoperability to increase timely and accurate financial management reporting across HHS. It provides automated funds control so managers can assess available program funds daily. UFMS uses a browser-based user interface to deliver robust query and reporting capabilities. UFMS reduces workload burden on vendors by leveraging one vendor database and eliminating errors caused by re-keying data.

14. Does this investment support a program assessed using the Program Assessment Rating Tool (PART)?

no

15. Is this investment for information technology?

yes

16. What is the level of the IT Project (per CIO Council's PM Guidance)?

Level 3

17. What project management qualifications does the Project Manager have? (per CIO Council's PM Guidance)

(1) Project manager has been validated as qualified for this investment

18. Is this investment identified as high risk on the Q4 - FY 2007 agency high risk report (per OMB memorandum M-05-23)?

yes

19. Is this a financial management system?

yes

19.a. If yes, does this investment address a FFMIA compliance area?

yes

19.a.1. If yes, which compliance area:

Financial Systems and Processes

19.b. If yes, please identify the system name(s) and system acronym(s) as reported in the most recent financial systems inventory update required by Circular A11 section 52.

Unified Financial Management System (UFMS)

20. What is the percentage breakout for the total FY2009 funding request for the following? (This should total 100%)

Area	Percentage
Hardware	3
Software	3
Services	78
Other	16

21. If this project produces information dissemination products for the public, are these products published to the Internet in conformance with OMB Memorandum 05-04 and included in your agency inventory, schedules and priorities?

n/a

22. Contact information of individual responsible for privacy related questions.

Name	Suzi Connor
Phone Number	(202) 260-5528
Title	OS Senior Privacy Official
Email	Suzi.Connor@hhs.gov

23. Are the records produced by this investment appropriately scheduled with the National Archives and Records Administration's approval?

no

24. Does this investment directly support one of the GAO High Risk Areas?

yes

1. Provide the total estimated life-cycle cost for this investment by completing the following table. All amounts represent budget authority in millions, and are rounded to three decimal places. Federal personnel costs should be included only in the row designated Government FTE Cost, and should be excluded from the amounts shown for Planning, Full Acquisition, and Operation/Maintenance. The total estimated annual cost of the investment is the sum of costs for Planning, Full Acquisition, and Operation/Maintenance. For Federal buildings and facilities, life-cycle costs should include long term energy, environmental, decommissioning, and/or restoration costs. The costs associated with the entire life-cycle of the investment should be included in this report.

All amounts represent Budget Authority

Note: For the cross-agency investments, this table should include all funding (both managing partner and partner agencies).

Government FTE Costs should not be included as part of the TOTAL represented.

Cost Type	Py-1 & Earlier -2006	PY 2007	CY 2008	BY 2009
Planning Budgetary Resources	32.616	1.200	0.300	0.000
Acquisition Budgetary Resources	163.702	37.300	6.650	0.000
Maintenance Budgetary Resources	34.141	26.052	32.347	41.627
Government FTE Cost	29.597	7.976	2.123	0.650
# of FTEs	158	40	10	4

2. Will this project require the agency to hire additional FTE's?

no

Agencies must use the following table to report performance goals and measures for the major investment and use the Federal Enterprise Architecture (FEA) Performance Reference Model (PRM). Map all Measurement Indicators to the corresponding Measurement Area and Measurement Grouping identified in the PRM. There should be at least one Measurement Indicator for each of the four different Measurement Areas (for each fiscal year). The PRM is available at www.egov.gov. The table can be extended to include performance measures for years beyond FY 2009.

Row	Fiscal Year	Strategic Goal Supported	Measurement Area	Measurement Grouping	Measurement Indicator	Baseline	Planned Improvement to the Baseline	Actual Results
1	2006	S.O. 1.2 - Increase health care service availability and accessibility	Mission and Business Results	Cost Accounting / Performance Measurement	Achievement of clean audit opinion.	2005 audit opinion.	Maintain a clean audit opinion.	Maintain a clean audit opinion.
2	2006	S.O. 1.2 - Increase health care service availability and accessibility	Customer Results	Customer Satisfaction	# and/or % of customers satisfied (defined as achieving a 4 or higher) such as number of internal HHS users, and stakeholders satisfied with UFMS.	2005 customer satisfaction rate.	Maintain and/or improve customer satisfaction rate.	Maintain and/or improve customer satisfaction rate.
3	2006	S.O. 1.3 - Improve health care quality, safety, cost and value	Customer Results	Accuracy of Service or Product Delivered	% of customers satisfied (defined as achieving a 4 or higher) with retrieval and accessibility of financial management information, including ease of online use.	2005 customer satisfaction (with retrieval and accessibility) rate.	To be determined.	To be determined.
4	2006	S.O. 1.3 - Improve health care quality, safety, cost and value	Processes and Activities	Financial Management	Total average cost per hour of producing monthly and annual reports.	Average 2005 cost per hour of producing monthly and annual reports (excludes CMS).`	To be determined (maintain or improve monthly and annual reconciliation and reporting costs).	To be determined (maintain or improve monthly and annual reconciliation and reporting costs).
5	2006	S.O. 1.3 - Improve health care quality, safety, cost and value	Processes and Activities	Planning	Total time for conducting monthly and annual reconciliation activities, (includes investigating discrepancies).	Total time in 2005 for conducting monthly and annual reconciliation activities (includes investigating discrepancies; excludes CMS).	To be determined (maintain or improve monthly and annual reconciliation and reporting hours).	To be determined (maintain or improve monthly and annual reconciliation and reporting hours).
6	2007	S.O. 1.2 - Increase health care service availability and accessibility	Mission and Business Results	Cost Accounting / Performance Measurement	Achievement of clean audit opinion.	2006 audit opinion.	Maintain a clean audit opinion.	Maintain a clean audit opinion.
7	2007	S.O. 1.2 - Increase health care service availability and accessibility	Customer Results	Customer Satisfaction	# and/or % of customers satisfied (defined as achieving a 4 or higher) such as number of internal HHS users, and stakeholders satisfied with UFMS.	2006 customer satisfaction rate.	Maintain and/or improve customer satisfaction rate.	Maintain and/or improve customer satisfaction rate.
8	2007	S.O. 1.3 - Improve health care quality, safety, cost and value	Customer Results	Accuracy of Service or Product Delivered	% of customers satisfied (defined as achieving a 4 or higher) with retrieval and accessibility of financial management information, including ease of online use.	2006 customer satisfaction (with retrieval and accessibility) rate.	To be determined.	To be determined.
9	2007	S.O. 1.3 - Improve health care quality, safety, cost and value	Processes and Activities	Financial Management	Total average cost per hour of producing monthly and annual reports.	$72/hour (excludes CMS)	To be determined (maintain or improve monthly and annual reconciliation and reporting costs.).	To be determined (maintain or improve monthly and annual reconciliation and reporting costs.).
10	2007	S.O. 1.3 - Improve health care quality, safety, cost and value	Processes and Activities	Planning	Total time for conducting monthly and annual reconciliation activities, (includes investigating discrepancies).	60,596 man-hours (excludes CMS)	To be determined (maintain or improve monthly and annual reconciliation and reporting hours).	To be determined (maintain or improve monthly and annual reconciliation and reporting hours).
11	2007	S.O. 1.3 - Improve health care quality, safety, cost and value	Processes and Activities	Innovation and Improvement	Staffing levels of HHS financial management staff.	566	Continue to identify opportunities for financial management FTE reduction.	Continue to identify opportunities for financial management FTE reduction.
12	2007	S.O. 1.3 - Improve health care quality, safety, cost and value	Technology	Reliability	UFMS uptime.	Average scheduled 2004 uptime for HHS FMS.	To be determined.	To be determined.
13	2008	S.O. 1.2 - Increase health care service availability and accessibility	Mission and Business Results	Workplace Policy Development And Management	Achievement of clean audit opinion.	2007 audit opinion	Maintain a clean audit opinion.
14	2008	S.O. 1.2 - Increase health care service availability and accessibility	Customer Results	Customer Satisfaction	# and/or % of customers satisfied (defined as achieving a 4 or higher) such as number of internal HHS users, and stakeholders satisfied with UFMS.	2007 customer satisfaction rate.	Maintain and/or improve customer satisfaction rate.
15	2008	S.O. 1.3 - Improve health care quality, safety, cost and value	Customer Results	Customer Retention	% of customers satisfied (defined as achieving a 4 or higher) with retrieval and accessibility of financial management information, including ease of online use.	2007 customer satisfaction (with retrieval and accessibility) rate.	To be determined.
16	2008	S.O. 1.3 - Improve health care quality, safety, cost and value	Processes and Activities	Financial Management	Total average cost per hour of producing monthly and annual reports.	$72/hour (excludes CMS)	To be determined (maintain or improve monthly and annual reconciliation and reporting costs.).
17	2008	S.O. 1.3 - Improve health care quality, safety, cost and value	Processes and Activities	Planning	Total time for conducting monthly and annual reconciliation activities, (includes investigating discrepancies).	60,596 man-hours (excludes CMS)	To be determined (maintain or improve monthly and annual reconciliation and reporting hours).
18	2008	S.O. 1.3 - Improve health care quality, safety, cost and value	Processes and Activities	Savings and Cost Avoidance	Staffing levels of HHS financial management staff.	566	Continue to identify opportunities for financial management FTE reduction.
19	2008	S.O. 1.3 - Improve health care quality, safety, cost and value	Technology	Overall Costs	UFMS uptime.	Average scheduled 2004 uptime for HHS FMS.	To be determined.
20	2009	S.O. 1.3 - Improve health care quality, safety, cost and value	Processes and Activities	Financial Management	Achievement of clean audit opinion.	2008 audit opinion	Maintain a clean audit opinion.
21	2009	S.O. 1.3 - Improve health care quality, safety, cost and value	Customer Results	Customer Satisfaction	% of customers satisfied (defined as achieving a 4 or higher) with retrieval and accessibility of financial management information, including ease of online use.	2008 customer satisfaction (with retrieval and accessibility) rate.	To be determined.
22	2009	S.O. 1.3 - Improve health care quality, safety, cost and value	Technology	Overall Costs	UFMS uptime.	Average scheduled 2004 uptime for HHS FMS.	To be determined.
23	2010	S.O. 1.3 - Improve health care quality, safety, cost and value	Mission and Business Results	Workplace Policy Development And Management	Achievement of clean audit opinion.	2009 audit opinion	Maintain a clean audit opinion.
24	2010	S.O. 1.3 - Improve health care quality, safety, cost and value	Processes and Activities	Financial Management	Staffing levels of HHS financial management staff.	566	Continue to identify opportunities for financial management FTE reduction.
25	2010	S.O. 1.3 - Improve health care quality, safety, cost and value	Technology	Reliability	UFMS uptime.	Average scheduled 2004 uptime for HHS FMS.	To be determined.
26	2011	S.O. 1.3 - Improve health care quality, safety, cost and value	Mission and Business Results	Workplace Policy Development And Management	Achievement of clean audit opinion.	2010 audit opinion	Maintain a clean audit opinion.
27	2011	S.O. 1.3 - Improve health care quality, safety, cost and value	Processes and Activities	Financial Management	Staffing levels of HHS financial management staff.	566	Continue to identify opportunities for financial management FTE reduction.
28	2011	S.O. 1.3 - Improve health care quality, safety, cost and value	Technology	Reliability	UFMS uptime.	Average scheduled 2004 uptime for HHS FMS.	To be determined.
29	2012	S.O. 1.3 - Improve health care quality, safety, cost and value	Mission and Business Results	Workplace Policy Development And Management	Achievement of clean audit opinion.	2011 audit opinion	Maintain a clean audit opinion.
30	2012	S.O. 1.3 - Improve health care quality, safety, cost and value	Processes and Activities	Financial Management	Staffing levels of HHS financial management staff.	566	Continue to identify opportunities for financial management FTE reduction.
31	2012	S.O. 1.3 - Improve health care quality, safety, cost and value	Technology	Reliability	UFMS uptime.	Average scheduled 2004 uptime for HHS FMS.	To be determined.
32	2013	S.O. 1.3 - Improve health care quality, safety, cost and value	Mission and Business Results	Workplace Policy Development And Management	Achievement of clean audit opinion.	2012 audit opinion	Maintain a clean audit opinion.
33	2013	S.O. 1.3 - Improve health care quality, safety, cost and value	Processes and Activities	Financial Management	Staffing levels of HHS financial management staff.	566	Continue to identify opportunities for financial management FTE reduction.
34	2013	S.O. 1.3 - Improve health care quality, safety, cost and value	Technology	Reliability	UFMS uptime.	Average scheduled 2004 uptime for HHS FMS.	To be determined.

1. Is this investment included in your agency's target enterprise architecture?

yes

2. Is this investment included in the agency's EA Transition Strategy?

yes

2.a. If yes, provide the investment name as identified in the Transition Strategy provided in the agency's most recent annual EA Assessment.

HHS Unified Financial Management System

3. Is this investment identified in a completed (contains a target architecture) and approved segment architecture?

no

4. Identify the service components funded by this major IT investment (e.g., knowledge management, content management, customer relationship management, etc.). Provide this information in the format of the following table. For detailed guidance regarding components, please refer to http://www.whitehouse.gov/omb/egov/.

Component: Use existing SRM Components or identify as NEW. A NEW component is one not already identified as a service component in the FEA SRM.

Reused Name and UPI: A reused component is one being funded by another investment, but being used by this investment. Rather than answer yes or no, identify the reused service component funded by the other investment and identify the other investment using the Unique Project Identifier (UPI) code from the OMB Ex 300 or Ex 53 submission.

Internal or External Reuse?: Internal reuse is within an agency. For example, one agency within a department is reusing a service component provided by another agency within the same department. External reuse is one agency within a department reusing a service component provided by another agency in another department. A good example of this is an E-Gov initiative service being reused by multiple organizations across the federal government.

Funding Percentage: Please provide the percentage of the BY requested funding amount used for each service component listed in the table. If external, provide the funding level transferred to another agency to pay for the service.

Row	Agency Component Name	Agency Component Description	Service Type	Component	Reused Component Name	Reused UPI	Internal or External Reuse?	Funding %
1	Standardized / Canned	Defines the set of capabilities that support the use of pre-conceived or pre-written reports.	Reporting	Standardized / Canned			No Reuse	0
2	Ad Hoc	Defines the set of capabilities that support the use of dynamic reports on an as needed basis.	Reporting	Ad Hoc			No Reuse	0
3	Expense Management	Defines the set of capabilities that support the management and reimbursement of costs paid by employees or an organization.	Financial Management	Expense Management			No Reuse	0
4	Billing and Accounting	Defines the set of capabilities that support the charging, collection and reporting of an organization's accounts.	Financial Management	Billing and Accounting			No Reuse	0
5	Revenue Management	Defines the set of capabilities that support the allocation and re-investment of earned net credit or capital within an organization.	Financial Management	Revenue Management			No Reuse	0
6	Data Exchange	Defines the set of capabilities that support the interchange of information between multiple systems or applications; includes verification that transmitted data was received unaltered.	Data Management	Data Exchange			No Reuse	0
7	Quality Management	Defines the set of capabilities that help determine the level that a product or service satisfies certain requirements.	Management of Processes	Quality Management			No Reuse	0
8	Procurement	Defines the set of capabilities that support the ordering and purchasing of products and services.	Supply Chain Management	Procurement			No Reuse	0

5. To demonstrate how this major IT investment aligns with the FEA Technical Reference Model (TRM), please list the Service Areas, Categories, Standards, and Service Specifications supporting this IT investment.

FEA SRM Component: Service Components identified in the previous question should be entered in this column. Please enter multiple rows for FEA SRM Components supported by multiple TRM Service Specifications.

Service Specification: In the Service Specification field, Agencies should provide information on the specified technical standard or vendor product mapped to the FEA TRM Service Standard, including model or version numbers, as appropriate.

Row	SRM Component	>Service Area	Service Category	Service Standard	Service Specification (i.e., vendor and product name)
1	Activity-Based Management	Service Access and Delivery	Access Channels	Web Browser	Currently no Internet connection. iSupplier is coming. Would require MS IE5.0 or higher.
2	Activity-Based Management	Service Access and Delivery	Access Channels	Other Electronic Channels	Oracle J*Initiator; Oracle ADI/SFTP; Sterling Commerce ConnectDirect; Quest TOAD
3	Activity-Based Management	Service Access and Delivery	Delivery Channels	Virtual Private Network (VPN)	N/A
4	Activity-Based Management	Service Access and Delivery	Service Requirements	Legislative / Compliance
5	Activity-Based Management	Service Access and Delivery	Service Requirements	Hosting	CDC MTDC through 6/10/2006; NIH CIT after 06/10/2006
6	Activity-Based Management	Service Access and Delivery	Service Transport	Supporting Network Services	SQL*NET; TCP/IP/ HTTP
7	Activity-Based Management	Service Access and Delivery	Service Transport	Service Transport	SSH; HTTPS
8	Activity-Based Management	Service Platform and Infrastructure	Support Platforms	Platform Independent	Sun Java; Oracle PL*SQL
9	Activity-Based Management	Service Platform and Infrastructure	Support Platforms	Platform Dependent	Sun Solaris
10	Activity-Based Management	Service Platform and Infrastructure	Delivery Servers	Web Servers	Oracle Apache Web Server; Sun Solaris OS
11	Activity-Based Management	Service Platform and Infrastructure	Software Engineering	Software Configuration Management	Mercury ITF/Kintana; RCS (currently); CVS (in future)
12	Activity-Based Management	Service Platform and Infrastructure	Software Engineering	Test Management	Mercury Test Director; Mercury Load Runner; Mercury Quality Center (in future)
13	Activity-Based Management	Service Platform and Infrastructure	Hardware / Infrastructure	Servers / Computers	Sun Servers (FISK)
14	Activity-Based Management	Service Platform and Infrastructure	Hardware / Infrastructure	Embedded Technology Devices	CISCO PIX FW: Thales HW encryption device; F5 BigIP (future); Nokia 530FW
15	Activity-Based Management	Service Platform and Infrastructure	Hardware / Infrastructure	Network Devices / Standards	CISCO CSS switches
16	Activity-Based Management	Service Platform and Infrastructure	Hardware / Infrastructure	Peripherals
17	Activity-Based Management	Service Platform and Infrastructure	Database / Storage	Database	Oracle RDBMS
18	Activity-Based Management	Service Platform and Infrastructure	Database / Storage	Storage	Sun 3960 (currently); EMC DMX2000 (in future)
19	Activity-Based Management	Component Framework	Security	Certificates / Digital Signatures	N/A
20	Activity-Based Management	Component Framework	Security	Supporting Security Services	SSL; HTTP
21	Activity-Based Management	Component Framework	Presentation / Interface	Content Rendering	XML Publisher; Adobe PDF
22	Activity-Based Management	Component Framework	Business Logic	Platform Independent	N/A
23	Activity-Based Management	Component Framework	Business Logic	Platform Dependent	Oracle Federal Financials; OFF PL*SQL
24	Activity-Based Management	Component Framework	Data Interchange	Data Exchange	SFTP; Sterling Commerce ConnectDirect
25	Activity-Based Management	Component Framework	Data Management	Database Connectivity	SQL*NET
26	Activity-Based Management	Component Framework	Data Management	Reporting and Analysis	Oracle Discoverer; Quest TOAD; SQL+
27	Activity-Based Management	Service Interface and Integration	Integration	Middleware	Oracle OCI
28	Activity-Based Management	Service Interface and Integration	Interoperability	Data Format / Classification	ASCII; PDF
29	Activity-Based Management	Service Interface and Integration	Interface	Service Discovery	DNS

6. Will the application leverage existing components and/or applications across the Government (i.e., FirstGov, Pay.Gov, etc)?

yes

6.a. If yes, please describe.

This investment leverages: Financial Management Line of Business. multi-OPDIVs

1. Does the investment have a Risk Management Plan?

yes

1.a. If yes, what is the date of the plan?

2007-07-11

1.b. Has the Risk Management Plan been significantly changed since last year's submission to OMB?

yes

1.c. If yes, describe any significant changes:

HHS recognizes that managing investment risk is fundamentally altered during the steady state phase where the focus transitions from on-time, on-budget deployment and user acceptance to monitoring how the investment is performing. That approach is documented in the UFMS Program Management Manual dated July 11, 2007. This manual documents a series of management practices and controls the UFMS O&M program has in place to manage risk and performance for the UFMS application. The current approach distinguishes risk management as a proactive process to identify, assess, and treat risks that may prevent program service delivery. Conversely, issue management is recognized as a reactive process to respond to known issues that are already preventing service delivery. Operational risks are documented using a risk register which are reviewed on a periodic basis to understand status of day-to-day risk treatments, consider changes to the risk assessment, and the identification and assessment of new risks. In addition, program level risk assessments are conducted monthly in conjunction with the UFMS business owner. These assessments focus on identifying and mitigating risks that have the potential to jeopardize benefits realized from the investment. The plan also integrates performance management at multiple tiers. Performance is monitored at the system operations, and contractor level. The program uses system performance metrics, such as system uptime, to monitor system risk daily and relies on operational metrics, such as backlog, timeliness and customer satisfaction, to monitor operational risks to the program on a daily or weekly basis. The program routinely disseminates these metrics to UFMS customers and stakeholders. Service delivery performance is reinforced by a performance based contract for the prime UFMS O&M core service provider which incorporates financial incentives and penalties for performance that are further mapped to O&M program processes such as incident management, change management and program management. Finally the UFMS O&M program conducts daily status meetings, weekly schedule review meetings, and monthly executive status meetings to monitor costs and schedule, manage program performance and manage risk persistently. The program operates using IT Information Library(TM) methodology.

3. Briefly describe how investment risks are reflected in the life cycle cost estimate and investment schedule:

HHS factored risk adjustment in its return on investment. The UFMS baseline risk assessment identified several areas of risk in UFMS that HHS is actively managing. Each risk item identified is assigned a cost estimate based on probability, cost impact, schedule impact, technical impact, and other impacts as identified. Risks were quantified for business risks, data/information risks, and risks associated with the capability of HHS to manage the investment. The single most significant business risk is that UFMS may not be able to convince users and OPDIV financial management offices to standardize data processing. If this occurs, then there will be negative impacts to future upgrades, required training and audits resulting in more costs to the UFMS program. HHS estimates the cost for mitigating this risk over the life of the program to be $6.78 million. This comprises support of two contractor personnel to assist in auditing at a FY08 cost of $300,000. In addition, it includes training for 414 personnel biannually, at a cost of $1,500 per person, which equates to an expected cost of $621,000 every two years beginning in FY09. Similarly, if data coming into UFMS from OPDIV systems is inaccurate, it will jeopardize the quality of financial management reporting UFMS can provide HHS and can negatively impact UFMS audits. Data quality is impacted by user behavior as well as by distinct complexities that arise from interfaces, at both the enterprise and OPDIV level. While UFMS does have a mechanism to handle errors and lower the chance for entering inaccurate data, it is important to continue promoting on-going annual training and updating standard operating procedures on entering data into the system for end users. To mitigate risk, UFMS estimates that it requires support equivalent to two contractor personnel to monitor incoming data, advise end users, and to engage in data cleansing as necessary. HHS estimates that such contractor support will cost approximately $300,000 per year beginning in FY08. Additional risk mitigation is provided by the UFMS software vendor who is contacted to provide some training to end-users and to resolve bugs and issues from the interfaces as they arise. UFMS will further mitigate this risk by providing additional government staff training as budgets permit. For this reason, HHS includes the cost of two additional GS-11 staff to attend UFMS annual maintenance training beginning in FY08 at an annual cost of $179,458.

1. Does the earned value management system meet the criteria in ANSI/EIA Standard 748?

yes

2. Is the CV% or SV% greater than ± 10%?

no

3. Has the investment re-baselined during the past fiscal year?

no