Auditors rap new retirement system upgrade

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OPM tests don't assure benefit accuracy, GAO says.

GAO prepared the letter for the use of Sens. Richard Durbin (D-Ill.) and Sam Brownback (R-Kansas), chairman and ranking Republican, respectively, on the Appropriations Subcommittee on Financial Services and General Government and their counterparts, Reps. Jose Serrano (D-N.Y.) and Ralph Regula (R-Ohio), who hold the posts of chairman and ranking Republican on the House subcommittee of the same name.Congress passed appropriations language in December directing OPM to update the legislators and audit agency on its progress in correcting problems in the four areas the oversight agency had pinpointed.In its earlier RSM reports, GAO has paid special attention to OPM's efforts to complete and perfect the Defined Benefits Technology Solution component of the system upgrade. GAO had recommended that the personnel agency devote sufficient funds and worker effort to the task of eliminating flaws in that component and assuring that tests of the system would pinpoint all areas that might need additional improvement.However, OPM's recently submitted RSM progress update failed to include information about User Acceptance Tests needed to assure that the new system would properly calculate retirement benefits, GAO said.The auditors cited four types of tests that OPM had omitted to discuss in its progress reports:Among additional criticisms, the congressional auditors cited OPM's failure to properly apply earned value management. When properly applied, EVM management tools, available as software applications, can keep track of whether and how progress on a software project matches up with the costs of the activity and pinpoint areas where progress varies from the planned costs and schedules. GAO stated that OPM had failed to create the baseline data needed to properly calculate EVM results.GAO added that OPM's $421.6 million estimate of the upgraded retirement system's life cycle costs isn't reliable because OPM hasn't provided proper documentation of the system's reliability and did not use an independent verification and validation contractor to develop cost data and asses its accuracy.An OPM spokesman, Mike Orenstein, disputed that amount in an interview with GCN following the release of the report, saying OPM's estimate for planning, acquisition and iplementation would be closer to $106 million, with an additional $254 million expected to go toward operations and maintenance.In appended comments to the GAO report, OPM stated that it had successfully implemented RSM Feb. 25 for the use of about 26,000 employees who rely on the General Services Administration's payroll processing center. OPM said it would provide a more detailed response to the GAO evaluation later. The personnel agency added that its response to the audit agency's comments had been limited by the brief time available between OPM's Feb. 20 report to GAO and Congress and today's letter.Additionally, an OPM spokesman, Mike Orenstein disputed the GAO's estimate

The Office of Personnel Management has spent more than $421 million on an overhaul of the federal retirement system that lacks fundamental controls on software quality and project efficiency, according to a report released today by the Government Accountability Office.

The congressional audit agency has dinged OPM's Retirement System Modernization (RSM) project before, notably in a Jan 28 report that cited program management flaws and called for improvements in:

  • System testing
  • System defect resolution
  • Program cost estimation
  • Program earned value management.










  • Parallel testing to verify that RSM calculates the same results as the paperwork-intensive systems it is set to replace.
  • Functional product testing of the system's components.
  • Tests to ensure that RSM can meet required speed and processing volume requirements.
  • Business capability tests to ensure that the new system is ready for operation by users.










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