DOD project hits the books

The Defense Department is running workshops to educate its workforce on a new common business language that eventually will be used to track, process and report thousands of business transactions.

Officials are teaching employees the business language, called the Standard Financial Information Structure, ahead of DOD’s implementation of a new financial management program—the Defense Enterprise Accounting and Management System (DEAMS).

SFIS provides “a road map for the configuration of general ledgers in target accounting systems,” said an SFIS official who requested anonymity. “Financial transactions processed within DEAMS will utilize SFIS information in support of general-ledger posting logic, financial report generation, and as a common basis for financial analysis across the department.”

The official said having a common basis for financial analysis across the entire department is important because of “numerous examples of language inconsistencies.”

The services will feed the SFIS information into DEAMS to create a standard financial system.

New accountability

DEAMS, announced in 2003, is a co-production of the Air Force, Transportation Command and Defense Finance and Accounting Service.

The system “will provide general ledger and reporting functionality for the Air Force,” said a DOD official, who requested anonymity. “DEAMS will serve as an Air Force subsidiary ledger to the overall DOD corporate general ledger. SFIS is supplemented by the [federal] Standard General Ledger Transaction Library, which uses SFIS information to delineate specific transaction postings to Treasury’s mandated USSGL accounts.”

Both DEAMS and SFIS are part of DOD’s Business Management Modernization Program, which has been folded into the Business Transformation Agency. DOD established BTA last year to centrally manage 18 of the largest enterprisewide business programs, including the Defense Travel System, the Standard Procurement System and the Defense Integrated Military Human Resources System.

John Senn, DEAMS functional manager, said the program aims to “replace outdated processes and systems.”

DOD took the first step in this process in July, buying Oracle Corp.’s Joint Financial Improvement software for $22.7 million.

Senn said the software will let DOD “introduce modern and efficient business practices based on industry leading practices” through DEAMS.

The second step will come early this year when DOD awards a contract for systems integration. Officials are reviewing proposals but would not give a timeline for implementation or award. Federal Sources Inc., a market research firm in McLean, Va., estimated the contract to be worth about $27.8 million over five years.

DEAMS aims to eliminate the multiple, noninteroperable procedures DOD has used and, increasingly, struggled with for decades. Accountants, adrift in seas of paper records, must track and collate everything from bills of lading to soldiers’ pay vouchers to the costs of repairing the Pentagon after Sept. 11, 2001. The challenge is immense.

The patchwork of new and legacy fiscal management systems have led to widespread inefficiencies—and growing disgruntlement.

In early November, and not for the first time, the Pentagon’s chaotic business systems were hammered in a Government Accountability Office report.

Although modernization has been under way for many years, the GAO concluded, “inefficiencies and inadequate accountability across DOD’s major business areas [have cost] billions of dollars in wasted resources annually.” DEAMS is one response. The creation of BTA is another.

DEAMS’ chief benefit, functional manager Senn has said, is “greatly improved cost management information.” In the near future, financial managers “will know exactly what it costs to deliver a shipment, complete a project or reimbursable order, utilize a specific transportation platform, or achieve specified outputs.”

Another benefit will come from labor-reporting software that will display assigned hours and support unmetered access to financial information, Senn said.

DEAMS, he added, is to be implemented in three phases:
  • By the executive agent Air Force and USTRANSCOM for a wide array of legacy financial systems, starting at Scott Air Force Base, Ill.;

  • By the remainder of the Air Force;

  • By other interested DOD organizations.

James E. Short, deputy assistant secretary of the Air Force for financial operations, said the program “will substantially improve warfighting capabilities and financial support to [service members]. It will standardize business processes not just for a command or a service, but also for the entire DOD.”

The challenges to implement DEAMS are considerable, officials said. Replacing multiple legacy financial management systems and processes, Senn acknowledged, requires a lot of coordination. DOD has launched a “change management program to ensure stakeholders understand ... the process” so they can readily adopt the new business model, he said.

David Walsh is a freelance writer in Chevy Chase, Md.

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