Legacy IT systems jeopardizing future of USDA’s National Finance Center, report says

Antiquated technology systems and inefficient manual processes have seriously eroded the efficiency of the National Finance Center and threaten to jeopardize its future, according to a new report.

In a wide-ranging audit of the U.S. Department of Agriculture division, the National Academy of Public Administration found a host of major concerns including unintegrated IT systems, lack of staff technical knowledge and the continued use of a COBOL-based mainframe system.

The National Finance Center provides human resources and payroll services to over 170 federal employers across all three branches of the government. NAPA’s audit warned that failure to modernize NFC’s IT systems and address further system issues poses an existential threat.

“NFC’s IT systems, including its mainframe, are in need of modernization. NFC’s antiquated IT systems and inefficient manual processes have degraded customer service, impeded efficiency, demoralized the workforce; increased the potential for errors, and created a rising risk of a service impairment, disruption, or possible cyber event,” NAPA authors wrote in the report.

The report added: “NFC’s future is at risk without prompt action. Should NFC fail, the consequences would be felt immediately by the hundreds of thousands of federal employees working for organizations like the Department of Homeland Security, Department of Justice, and NFC’s other approximately 170 clients.”

NFC was established 50 years ago, initially to serve the needs of agencies and organizations within USDA. The agency has never missed a payroll despite facing significant challenges outside of its control, including significant damage to its New Orleans headquarters during Hurricane Katrina, the COVID-19 pandemic and multiple other government shutdowns.