How IT modernization helped the Fiscal Service uncover $20M in improper payments

In the laborious marathon toward IT modernization, the Treasury Department’s Bureau of Fiscal Service says it found an unexpected win early on in the race.

The Fiscal Service merged five legacy systems together and developed a new post-payment application, which helped the Treasury Department’s Inspector General recover $20-30 million in improper payments last year.

Modernizing and developing the new system meant that the Fiscal Service had consolidated access to data it never had before, said Wes Johnson, deputy director for the Fiscal Service’s Philadelphia Financial Center, during an Oct. 25 Pegasystems panel discussion in Washington. With that new data source, the department partnered with the Treasury Inspector General and other IGs to reveal a substantial return on investment.

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“That win alone has helped keep the project going, because we’re able to say to everybody that we’re self-funding,” he said. Johnson’s office is responsible for sending out post-payments and works with more than 250 government agencies and 11,000 financial institutions to do so.

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The benefits are reaching those customer agencies as well, Johnson said.

The Bureau of Fiscal Service sends out payments on behalf of other agencies. Many of those agencies, such as the Veterans Affairs Department or Social Security Administration, have old, outdated legacy systems of their own.

Johnson said the Fiscal Service solution is beginning to help those departments, who are typically hamstrung by the capabilities of their outdated applications.

“We’re enabling them to do the process of their own analysis on our machine for them,” he said. “We provided them with capabilities through our systems that they didn’t have. Today, when let’s say Social Security makes a request, many times it takes weeks before they get their data and answer back. Today using our payment data, they can get that answer back in minutes, seconds many times.”

As many agencies attempt to whittle down their legacy IT spend and modernize major systems, the Fiscal Service said it acknowledged the need to share new solutions.

“Not to say that their systems are bad, but there’s only so much money,” Johnson said. “We can only spend so much money bringing things together. If we’re the new kid on the block with a more powerful tool, what we decided was that we wanted to make that available to everybody else, so they could play with the new toy without having to invest themselves.”

The system development process also reflected the responsibility the Bureau of Fiscal Service said it has for its partner agencies, Johnson said.

The bureau had to think carefully about using an agile development approach when it started to design the new system and that process might impact its partners. The Social Security Administration, for example, has specific needs when it integrates with the Fiscal Service system, Johnson said.

“If we don’t take all of that into consideration as well as all the other 250 agencies when we’re developing a certain sprint, then you run the risk — of when you come to final integration — that you’ve upset one of your partners,” he said.

The Justice Department, which is knee-deep in the development process of its own modernization project, also said that its partners, users and their needs were also a top priority.

Rick Smith, program manager for DoJ’s consolidated debt collection system, said he and his team made a concerted effort to think about those users at the beginning of the development process.

The 10-year-old system, which 84 U.S. attorneys’ offices and six litigation services use, manages and tracks the debt that is owed to the federal government and that Justice Department lawyers have litigated.

Smith met with attorneys to find out how they specifically use the system. But when he and his team presented the first test screens to the users, they were met with some resistance.

“It isn’t about change,” Smith said. “It’s about loss. People are afraid of what they’re going to lose. They’re not so afraid of going from this to that, but what am I losing in that process? We had to step back and say, ‘Let’s call this group in and let’s talk about that.’ We brought them in, and sure enough they had a lot to say.”

Smith said his team since made some tweaks to the design of the new user screens.

“You have to maintain that close relationship with all of your partners,” Johnson said. “It’s really [about] staying true to the design. When you get your customers to buy in, you get your partners to buy in, you get your integrator to buy in, stay true to that. That comprehensive and cohesive design that you design up front — whether you take an agile approach or waterfall approach — is critical to ensuring that your partnership and relationships are not harmed through that process.

Agile, waterfall or something else?

For Johnson, his partners and customers certainly changed the way he thought about agile versus waterfall development.

The same was true for Smith and the Justice Department, which is still relatively new to the agile process.

Smith and his team are using a hybrid approach as they develop the consolidated debt collection system. They’ve taken aspects of the agile process that they think they can be successful with — like breaking the project up into small parts — and coupled it with aspects of waterfall development.

“We needed more time to get through some of the design and requirement steps,” Smith said, so he split his team into two. One part was responsible for understanding all the requirements from DoJ’s users. The other took the lead on system development, based on the first group’s findings.

The process has four phases, which Smith has each broken down into smaller parts.

“We do discovery on a small chunk and then development, and then while that’s going on, we’re starting discovery on the next small chunk, and so on and so forth,” Smith said. “And then when the development is done, we loop back and we do user testing on that piece that’s done. But we don’t release it. That’s … one of the differences between agile and the way we did it. At the end of the phase we release everything.”

DoJ plans to deliver the first phase of the new system by the end of December, he said.