Concerns over risking delays in President Joe Biden’s signature federal aid for computer chip manufacturers have led the Commerce Department to postpone the rollout of a new financial system that has already mangled one agency’s finances and delayed employees’ tax forms.
Bloomberg Government learned about the Commerce Department’s decision on Thursday - the same day Biden was on the campaign trail in New York calling the semiconductor grants, approved by Congress in the 2022 CHIPS and Science Act (Public Law 117-167), “one of the most significant science and technology investments in our history.” The White House sees CHIPS grants as vital to a central theme of Biden’s re-election: a revival in domestic manufacturing. Any snafus in issuing them could be politically embarrassing.
The National Institute of Standards and Technology, a part of Commerce, is responsible for awarding $50 billion in grants and research and development funds.
Read more: Unpaid Bills at National Weather Service Caused System Outages
Lindsay Hochberg, a project manager for the new financial system at Commerce, announced the pause in rolling out the new system that would pay those grants at an employee “town hall” on Thursday. The agency instead will to continue to rely on an older payment system with fewer data analytics options than the new system promised.
“There’s a lot of grants that are coming for the organizations specifically related to CHIPS that we want to make sure are fully executed,” Hochberg said. She added the “prudent option for the agency would be to put a pause and make sure that we’re accounting for the lessons learned” from the system’s failures at the National Oceanic and Atmospheric Administration, first reported earlier this month by Bloomberg Government.
The Commerce Department posted a link to the town hall online on its public-facing website, but did not otherwise publicize the information. An attendee at the town hall also confirmed the remarks and BGOV watched a video recording of the event.
The new financial system, known as Business Applications Solution, was expected to be in place at NIST and other Commerce agencies starting in October. Accenture Federal Services, a subsidiary of Accenture, won a $341 million contract with the Commerce Department in 2020 to modernize the department’s financial systems, a contract that runs for up to 20 years. Spokespeople for the Commerce Department, Accenture, and NOAA did not provide further comment when contacted by Bloomberg Government.
The delayed NIST implementation “at least is an acknowledgment of how bad the system is,” said JoAnn Becker, president of the union that represents National Weather Service employees, who filed a grievance over delayed reimbursements through the system.
The announcement follows months of financial chaos at NOAA which is also housed within the Commerce Department. The agency failed to pay its bills for several months, leading electric companies to cut power to NOAA and National Weather Service facilities.
The financial problems are more widespread than Commerce officials have publicly disclosed, according to employees and internal documents. Among the issues are:
- an inability to track what bills are being paid to various vendors;
- foul ups in processing grants through the Economic Development Administration and National Science Foundation;
- inaccuracies in tax records sent to federal workers;
- delays in reimbursements for federal workers.
“It’s worse” than it was a few months ago, Becker said in a phone interview. “BAS is still not fixed.”
Officials have had to publish a running “Top 10" list of problems they’re trying to fix with the new system, highlighting a widespread series of financial problems at NOAA.
NOAA’s failure to pay bills for several months, including at the National Weather Service, has drawn attention from members of Congress. The Senate Appropriations Commerce-Justice-Science Subcommittee, which is responsible for funding the agency, contacted National Weather Service Director Ken Graham about the backlog of delayed payments, including missed bills due to Georgia Power, a congressional aide said.
Flying Blind
For months, thousands of NOAA payments totaling tens of millions of dollars were blocked from going through, leading electric companies to cut power at NOAA and National Weather Service facilities. Agency budget officials can see that money is now going out to vendors, but they can’t tie the payments to any specific invoice, a NOAA financial analyst said, likening the experience to flying blind.
The employee spoke on condition of anonymity after being warned by a supervisor that publicly discussing the agency’s problems could damage their career, the analyst said.
Employees have been paid back after months of delays because officials manually pushed the money through, not because the financial system is actually working, Becker said.
Commerce Department Deputy Assistant Secretary for Administration Jeremy Pelter acknowledged that officials have manually paid thousands of bills in the town hall.
“Our teams have manually worked through thousands of backlogged invoices and vouchers,” Pelter said at the town hall, adding that there’s “still some ongoing work” to make payments.
Employees’ W-2 tax forms were also affected by the new BAS system.
NOAA employees who moved in 2023 and had “permanent change of station” costs on their tax forms got delayed W-2 forms, Becker said. There have also been errors on tax forms, including one instance in which an employee’s residence was listed as the wrong state, Becker added.
The NOAA financial analyst also said there have been cases in which employees received a second, corrected, W-2 form, though it wasn’t labeled as a corrected W-2C form, as the Internal Revenue Service requires.
NOAA’s ability to hire new employees has been slowed down because the new financial system won’t process refunds on moving costs, Becker said. There were cases in which employees budgeted too much for moving costs and the extra money NOAA initially set aside for those costs can’t be recovered, even though it wasn’t spent. The system is holding up nearly $3 million in excess moving costs, Becker said.
“We’re already short staffed, so holding up money is creating bigger and bigger staffing issues,” Becker said.
Reimbursements of moving costs were also held up, Becker said.
Those delays were part of a grievance filed by the National Weather Service Employees Organization over delayed reimbursement for both moving and travel expenses. NOAA’s handbook for travel card use says employees “are personally responsible for paying their travel card bills even if they have not been reimbursed by NOAA.”
‘Top 10' List of Problems
The problems with NOAA’s new financial system are so widespread, the agency took to publishing a weekly “Top 10” list of issues officials are working to fix, which is shared internally among NOAA employees.
The “Top 10" list published April 9 lists a range of problems more widespread than anything publicized by NOAA. It includes problems with processing grant funds from the Economic Development Administration and National Science Foundation. There were also issues monitoring NOAA property reports. And the agency’s new contract-writing system has alerted officials that there are insufficient funds even when money is available, the April 9 list says. The April 23 “Top 10" list reiterates problems with National Science Foundation grants.
Hochberg asked town hall attendees to coordinate with the team in charge of the financial system to make sure that “if we’ve got a high-priority grant that’s coming through, that people are watching that and sort of hand-holding it through the process” to pay grants.
Also, the new financial system has blocked some payments from coming into NOAA. The Federal Aviation Administration pays the National Weather Service for work done by meteorologists at Air Traffic Control Centers, but BAS is blocking NOAA from processing those invoices, Becker said.
Officials still plan to implement the financial system at the Census Bureau in October 2025 - as it begins to ramp up for the 2030 census, Hochberg said.
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