More setbacks for DOD financial management reform?

Improving Defense Department bookkeeping has been an ongoing challenge at the Pentagon, and though officials have cautiously touted progress, government watchdogs often report systematic flaws. The latest examination of DOD financial management efforts, a DOD Inspector General report on the Air Force’s enterprise resource planning program, reveals more ongoing struggles.

Though still relatively early in its deployment, the Air Force Defense Enterprise Accounting and Management System (DEAMS) – a broad ERP aimed at modernizing financial management – has run into problems. Most recently, as detailed in the DOD IG report released Sept. 28, an unreliable chart of accounts within DEAMS is hindering auditability.

“DEAMS lacked critical functional capabilities needed to generate accurate and reliable financial management information,” the report stated. “DEAMS data lack validity and reliability.”

The problems appear to be rooted in unauthorized changes and inconsistencies in the system’s data, which are part of a larger problem with deficient monitoring of and policies for modifications to system information. In addition, the DOD IG found the Air Force did not report financial data directly to the Defense Department Reporting System, which is used to standardize and report on DOD-wide bookkeeping.

According to the DOD IG, the setbacks put the Air Force at risk of missing a mandated DOD-wide deadline to prove audit-readiness with a full Statement of Budgetary Resources by the end of fiscal 2014.

The findings seem to contradict some reassurances DOD and Air Force officials gave to a House Armed Services subcommittee just two weeks before the IG report’s release.

On Sept. 14 Marilyn Thomas, principal deputy assistant secretary of the Air Force (financial management and comptroller) testified that the department had made “significant progress” on getting audit-ready. Yet she also acknowledged a number of challenges the service is facing along the way.

“Despite tremendous progress to date, we do face challenges to include the need to improve our legacy systems in order to achieve the accelerated timeline, educate our airmen on what they need to do to achieve audit readiness, and build the skills and experience required to achieve and maintain audit readiness in all of our resource management specialties,” Thomas said in her testimony.

According to Thomas, a critical part of the problem is the quantity of old systems and processes – some dating back decades – that must either be modernized or phased out in favor of new systems. It is even more difficult to make the transition under an accelerated timeline to become audit-ready, which Defense Secretary Leon Panetta pledged last year.

“A primary challenge facing the Air Force is adhering to the schedule for modernizing our legacy information technology systems and deploying the targeted [ERP] systems. Over the last two years, we have identified over 160 different systems that record, track, and report information used to support the financial statements,” Thomas testified. “Our challenge over the next two years is to identify, prioritize and implement cost-effective improvements to these systems so that we can meet the accelerated audit timeline for the Statement of Budgetary Resources.”

That issue is not limited to the Air Force, as other officials stated in the Sept. 14 testimony.

“Although a nice new system sounds a lot easier than a legacy system, really there are a lot more internal controls and complexities,” DOD Deputy Chief Management Officer Elizabeth McGrath said.

For DEAMS, the DOD IG recommended that Thomas and her office validate the corrective actions already under way before further fielding the system, which is being rolled out in a demonstration at Scott Air Force Base. The IG also recommended DEAMS managers implement better monitoring controls that identify and fix data inconsistencies. According to the report, Thomas agreed to the recommendations.

About the Author

Amber Corrin is a former staff writer for FCW and Defense Systems.

The 2015 Federal 100

Meet 100 women and men who are doing great things in federal IT.

Featured

  • Shutterstock image (by venimo): e-learning concept image, digital content and online webinar icons.

    Can MOOCs make the grade for federal training?

    Massive open online courses can offer specialized IT instruction on a flexible schedule and on the cheap. That may not always mesh with government's preference for structure and certification, however.

  • Shutterstock image (by edel): graduation cap and diploma.

    Cybersecurity: 6 schools with the right stuff

    The federal government craves more cybersecurity professionals. These six schools are helping meet that demand.

  • Rick Holgate

    Holgate to depart ATF

    Former ACT president will take a job with Gartner, follow his spouse to Vienna, Austria.

  • Are VA techies slacking off on Yammer?

    A new IG report cites security and productivity concerns associated with employees' use of the popular online collaboration tool.

  • Shutterstock image: digital fingerprint, cyber crime.

    Exclusive: The OPM breach details you haven't seen

    An official timeline of the Office of Personnel Management breach obtained by FCW pinpoints the hackers’ calibrated extraction of data, and the government's step-by-step response.

  • Stephen Warren

    Deputy CIO Warren exits VA

    The onetime acting CIO at Veterans Affairs will be taking over CIO duties at the Office of the Comptroller of the Currency.

  • Shutterstock image: monitoring factors of healthcare.

    DOD awards massive health records contract

    Leidos, Accenture and Cerner pull off an unexpected win of the multi-billion-dollar Defense Healthcare Management System Modernization contract, beating out the presumptive health-records leader.

  • Sweating the OPM data breach -- Illustration by Dragutin Cvijanovic

    Sweating the stolen data

    Millions of background-check records were compromised, OPM now says. Here's the jaw-dropping range of personal data that was exposed.

  • FCW magazine

    Let's talk about Alliant 2

    The General Services Administration is going to great lengths to gather feedback on its IT services GWAC. Will it make for a better acquisition vehicle?

Reader comments

Tue, Oct 9, 2012 Cowboy Joe

It's not that the SAS databases themselves are all that bad, but the user interfaces for the ERP systems I've seen are like trippin' back 30 years or more. Lots of scrolling back and forth and up and down, tryin' t' find "cow-dog" icons that have no mnemonic value, and havin' t' memorize long mostly random accounting numbers ... No honest HSI what so ever. That always saves lot a' money in the long term, don't it.

Tue, Oct 9, 2012 Christopher Hanks United States

Readers might like to compare for themselves what the IG is saying about the DEAMS program compared to what the DEAMS Program Office itself was saying only seven months ago: http://www.deams.af.mil/news/story_print.asp?id=123292001 At some point, DOD leaders will have to acknowledge - and confront the Congress with the hard truth - that it has NEVER made sense to expect the DOD to produce private-sector-style balance sheets and income statements as if it were a profit-seeking business. Unless and until that happens, we will continue to see ERP Program Offices and OSD executives like Ms. McGrath issuing brave press releases on how swimmingly things are going, while the IG auditors (who are also just following orders)continue to rain on everyone's parade.

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above