Military financial systems flagged

"Development of the Defense Finance and Accounting Service Corporate Database and Other Financial Management Systems"

The military services are moving forward with new financial management systems before the Defense Department has established an overall financial management enterprise architecture or a set of accounting standards, a report from the Department of Defense (DOD) inspector general (IG) says.

Such hodgepodge system development could result in the military services spending more than $2 billion to develop financial management systems with no assurance they will function as one integrated, department-wide system, according to the IG report.

The lack of an integrated financial management system may prolong DOD's inability to develop auditable financial statements, according to the Nov. 7 DOD IG report, "Development of the Defense Finance and Accounting Service Corporate Database and Other Financial Management Systems."

DOD's huge number of legacy financial systems feed data to the department's core accounting systems. Because there have been no standards, DOD has developed software that translates the data into the core system. Those translation systems are inefficient and often prone to errors.

The IG report notes that while DOD has been working to develop a financial management enterprise architecture that would provide a framework for developing the feeder systems, the military services have been moving forward with replacing those outdated systems.

"DOD continues to develop [the Defense Finance and Accounting Service Corporate Database] and other financial management systems, which will not establish an integrated financial management system," the IG report states.

The Defense Logistics Agency said that its $1 billion supply chain management system could not work with the Defense Finance and Accounting Service Corporate Database (DCD) and other standard systems, the report says. The Army and the Navy are purchasing enterprise resource planning (ERP) systems to replace the existing systems that feed financial data to the DOD core accounting system.

Those ERP systems use commercial data structures, which are not standardized, the report said.

"Each component cannot solve DOD problems independently and without a plan," the report says. "As a result, current DOD financial management system developments are not coordinated and will not lead to the establishment of an integrated financial management system."

The IG recommends that DOD conduct a review of critical financial management systems to ensure that projects lead to the development of an integrated financial management system.

The IG also recommends that DOD develop a plan to minimize the development of nonstandard systems until an enterprise architecture is completed.

In their comments on the report, DOD officials said that the DOD comptroller has directed that current ERP initiatives be approved before proceeding beyond the prototype stage to ensure that these projects are consistent with DOD's modernization efforts.

About the Author

Christopher J. Dorobek is the co-anchor of Federal News Radio’s afternoon drive program, The Daily Debrief with Chris Dorobek and Amy Morris, and the founder, publisher and editor of the DorobekInsider.com, a leading blog for the Federal IT community.

Dorobek joined Federal News Radio in 2008 with 16 years of experience covering government issues with an emphasis on government information technology. Prior to joining Federal News Radio, Dorobek was editor-in-chief of Federal Computer Week, the leading news magazine for government IT decision-makers and the flagship of the 1105 Government Information Group portfolio of publications. As editor-in-chief, Dorobek served as a member of the senior leadership team at 1105 Government Information Group, providing daily editorial direction and management for FCW magazine, FCW.com, Government Health IT and its other editorial products.

Dorobek joined FCW in 2001 as a senior reporter and assumed increasing responsibilities, becoming managing editor and executive editor before being named editor-in-chief in 2006. Prior to joining FCW, Dorobek was a technology reporter at PlanetGov.com, one of the first online community centers for current and former government employees. He also spent five years at Government Computer News, another leading industry publication, covering a variety of federal IT-related issues.

Dorobek is a frequent speaker on issues involving the government IT industry, and has appeared as a frequent contributor to NewsChannel 8’s Federal News Today program. He began his career as a reporter at the Foster’s Daily Democrat, a daily newspaper in Dover, N.H. He is a graduate of the University of Southern California. He lives in Washington, DC.


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