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DOD Financial Management: Improved Controls, Processes, and Systems Are Needed for Accurate and Reliable Financial Information

Description: A publication issued by the Government Accountability Office with an abstract that begins "As one of the largest and most complex organizations in the world, the Department of Defense (DOD) faces many challenges in resolving serious problems in its financial management and related business operations and systems. DOD is required by various statutes to (1) improve its financial management processes, controls, and systems to ensure that complete, reliable, consistent, and timely information is prepared and responsive to the financial information needs of agency management and oversight bodies, and (2) to produce audited financial statements. Over the years, DOD has initiated numerous efforts to improve the department's financial management operations and to try to achieve an unqualified (clean) opinion on the reliability of its reported financial information. These efforts have fallen short of sustained improvement in financial management or financial statement auditability. The Subcommittee has asked GAO to provide its perspective on the status of DOD's financial management weaknesses and its efforts to resolve them."
Date: September 23, 2011
Creator: United States. Government Accountability Office.
Partner: UNT Libraries Government Documents Department

DOD Financial Management: Ineffective Risk Management Could Impair Progress toward Audit-Ready Financial Statements

Description: A letter report issued by the Government Accountability Office with an abstract that begins "The Department of Defense (DOD) has taken some actions to manage its department-level risks associated with preparing auditable financial statements through its Financial Improvement and Audit Readiness (FIAR) Plan. However, its actions were not fully in accordance with widely recognized guiding principles for effective risk management, which include (1) identifying risks that could prevent it from achieving its goals, (2) assessing the magnitude of those risks, (3) developing risk mitigation plans, (4) implementing mitigating actions to address the risks, and (5) monitoring the effectiveness of those mitigating actions. DOD did not have documented policies and procedures for following these guiding principles to effectively manage risks to the implementation of the FIAR Plan."
Date: August 2, 2013
Creator: United States. Government Accountability Office.
Partner: UNT Libraries Government Documents Department

DOD Financial Management: Improvements Needed in Prompt Payment Monitoring and Reporting

Description: Correspondence issued by the Government Accountability Office with an abstract that begins "We found that while DOD has a process in place for monitoring and reporting on late-payment penalties, this process has significant flaws and omissions that result in incomplete and inaccurate data, thereby limiting the effectiveness of the process. Specifically, DOD’s performance measure, or metric, for late-payment penalties did not include about $54 billion of commercial payments subject to the Prompt Payment Act, and DOD did not assess the data for accuracy or completeness. In addition, at the time of our review, DOD was not monitoring or reporting on discounts lost across the department because, DOD officials stated, the metric had consistently met its goal. The deficiencies we found in DOD’s process for monitoring and reporting on late-payment penalties and discounts lost significantly increase the risk to the accuracy and completeness of reported data, thus preventing DOD officials and congressional oversight committees from obtaining the reliable and comprehensive data they need for assessing the extent of any issues concerning late-payment penalties and discounts lost across DOD. According to DOD officials and reports, a major contributor to late-payment penalties incurred and discounts lost was the late receipt of documents necessary to validate receipt and acceptance of goods or services and make payments. We are recommending that DOD establish procedures for identifying all DOD systems that process commercial payments, validating completeness and accuracy of late-payment penalty metric data, and monitoring discounts lost. In commenting on a draft of our report, DOD concurred with our recommendations and cited planned corrective actions to address the issues that gave rise to our recommendations."
Date: June 26, 2012
Creator: United States. Government Accountability Office.
Partner: UNT Libraries Government Documents Department

DOD Financial Management: Reported Status of Department of Defense's Enterprise Resource Planning Systems

Description: Correspondence issued by the Government Accountability Office with an abstract that begins "The following is a list of the specific data elements that we requested DOD provide an updated status as of December 31, 2011, for each of the ERPs."
Date: March 30, 2012
Creator: United States. Government Accountability Office.
Partner: UNT Libraries Government Documents Department

DOD Financial Management: Marine Corps Statement of Budgetary Resources Audit Results and Lessons Learned [Reissued on October 17, 2011]

Description: A letter report issued by the Government Accountability Office with an abstract that begins "Long-standing weaknesses in Department of Defense (DOD) business processes, systems, and controls have hindered efforts to achieve financial audit readiness. Because DOD relies heavily on budget information for day-to-day management decisions, in August 2009, the DOD Comptroller designated the Statement of Budgetary Resources (SBR) as an audit priority. The U.S. Marine Corps was identified as the pilot military service for an SBR audit. GAO was asked to determine (1) the primary reasons the Marine Corps was unable to obtain an opinion on its fiscal year 2010 SBR; (2) the effectiveness and status of the Marine Corps' remediation plan, and (3) military service efforts to leverage Marine Corps SBR audit lessons. GAO reviewed auditor findings and recommendations, evaluated the Marine Corps corrective action plans, and reviewed documentation on military service audit readiness and lessons learned efforts. During its work, GAO met with DOD, Marine Corps, military service, and Defense Finance and Accounting Service (DFAS) officials and the auditors.."
Date: September 15, 2011
Creator: United States. Government Accountability Office.
Partner: UNT Libraries Government Documents Department

DOD Financial Management: Weaknesses in Controls over the Use of Public Funds and Related Improper Payments

Description: A publication issued by the Government Accountability Office with an abstract that begins "The Department of Defense (DOD) is required to design and implement effective internal controls, including controls over its use of public funds ("funds controls") and controls over its payment processes ("payment controls"). As a steward of the public's resources, DOD is responsible and accountable for (1) using public funds efficiently and effectively and for the purposes and within the time frames and amounts prescribed by law, (2) making payments to the right parties in the correct amount within allowable time frames and recouping any improper payments, and (3) accurately recording and reporting on its transactions and use of public funds. GAO's testimony focuses on (1) challenges DOD faces in its funds control, and their effect on the reliability of DOD's financial information, especially the budgetary information in DOD's Statement of Budgetary Resources and (2) weaknesses in DOD's payment controls that put the department at risk of making improper payments. This statement is based on our prior work and reports issued by the department's Inspector General (DOD IG). The panel requested that GAO provide its perspective on the status of DOD's process for identifying and reporting on improper payments, examples of Antideficiency Act violations within DOD along with the causes of these violations, and the effect of problem disbursements on DOD's ability to report reliable information on its financial statements."
Date: September 22, 2011
Creator: United States. Government Accountability Office.
Partner: UNT Libraries Government Documents Department

DOD Financial Management: Improvements Are Needed in Antideficiency Act Controls and Investigations

Description: A letter report issued by the Government Accountability Office with an abstract that begins "Senate Report No. 110-77 directed GAO to review the Department of Defense's (DOD) procedures for Antideficiency Act (ADA) violations. GAO focused on whether (1) existing DOD funds control systems, processes, and internal controls provide reasonable assurance that ADA violations will be prevented or detected and whether key funds control personnel are trained; (2) investigations of ADA violations are processed in accordance with applicable DOD regulations; and (3) DOD tracks and reports metrics pertaining to its ADA investigations and what disciplinary actions are taken when ADA violations have occurred. GAO's review included all 54 ADA military service case files closed in fiscal years 2006 and 2007. GAO did not assess the appropriateness of the conclusions reached or of the disciplinary actions taken for the ADA cases."
Date: September 26, 2008
Creator: United States. Government Accountability Office.
Partner: UNT Libraries Government Documents Department

DOD Financial Management: Improvement Needed in DOD Components' Implementation of Audit Readiness Effort

Description: A letter report issued by the Government Accountability Office with an abstract that begins "The Department of Defense (DOD) has been required to prepare audited annual financial statements since 1997 but to date, has not been able to meet this requirement. The National Defense Authorization Act of Fiscal Year 2010 mandated that DOD be prepared to validate [certify] that its consolidated financial statements are audit-ready by September 30, 2017. In May 2010, DOD issued its Financial Improvement and Audit Readiness (FIAR) Guidance to provide a methodology for DOD components to follow to develop and implement their Financial Improvement Plans (FIPs) for achieving audit readiness. The DOD FIP is a framework for planning and tracking the steps and supporting documentation. GAO was asked to assess the FIP methodology provided in the FIAR Guidance, the development and implementation of selected components' FIPs, and DOD's monitoring and oversight of the FIP process. To do this, GAO analyzed the FIAR Guidance, reviewed two selected FIPs--Navy Civilian Pay and Air Force Military Equipment--and reviewed relevant documentation and interviewed DOD and component officials.."
Date: September 13, 2011
Creator: United States. Government Accountability Office.
Partner: UNT Libraries Government Documents Department

DOD Financial Management: Adjudication of Butterbaugh Claims for the Restoration of Annual Leave or Pay

Description: Correspondence issued by the Government Accountability Office with an abstract that begins "This report formally transmits a briefing in response to section 1045 of the National Defense Authorization Act for Fiscal Year 2008. The Act required GAO to review and report on the adjudication of claims filed as a result of the 2003 decision by the U.S. Court of Appeals for the Federal Circuit in the case of Butterbaugh v. Department of Justice. In that case, the Court decided that federal employees who are members of the military reserves should not have been charged military leave for reserve duty days that occurred outside their civilian work schedule. Under existing federal law, employees are entitled to seek restoration of leave or monetary compensation. On July 8, 16, and 22, 2008, we provided briefings on the status of the adjudication of such claims by the Defense Finance and Accounting Service and selected other agencies to cognizant committee staff to satisfy the mandate. Based on the results of our review, we are not making any recommendations for agency action."
Date: July 28, 2008
Creator: United States. Government Accountability Office.
Partner: UNT Libraries Government Documents Department

DOD Financial Management: The Army Faces Significant Challenges in Achieving Audit Readiness for Its Military Pay

Description: Testimony issued by the Government Accountability Office with an abstract that begins "We found that the Army could not readily identify a complete population of Army payroll accounts for fiscal year 2010, given existing procedures and systems. The Army and DFAS-IN did not have an effective, repeatable process for identifying the population of active duty payroll accounts. In addition, the Defense Manpower Data Center (DMDC), DOD’s central source for personnel information, did not have an effective process for comparing military pay account files to military personnel files to identify a valid population of military payroll transactions. For example, it took 3 months and repeated attempts before DFAS-IN could provide a population of service members who received active duty Army military pay in fiscal year 2010. Similarly, it took DMDC over 2 months to compare the total number of fiscal year 2010 active duty payroll accounts to its database of personnel files. "Standards for Internal Control in the Federal Government" requires all transactions and other significant events to be clearly documented and the documentation readily available for examination. DOD’s "Financial Improvement and Audit Readiness (FIAR) Guidance" sets out key tasks essential to achieving audit readiness, including defining and identifying the population of transactions for audit purposes. The "GAO/PCIE Financial Audit Manual" provides guidance concerning typical control activities, such as independent checks on the validity, accuracy, and completeness of computer-processed data. Without effective processes for identifying a complete population of Army military pay records and comparing military pay accounts to personnel records, the Army will have difficulty meeting DOD’s 2014 Statement of Budgetary Resources audit readiness goal and its 2017 goal for a complete set of auditable financial statements."
Date: March 22, 2012
Creator: United States. Government Accountability Office.
Partner: UNT Libraries Government Documents Department

DOD Financial Management: Significant Improvements Needed in Efforts to Address Improper Payment Requirements

Description: A letter report issued by the Government Accountability Office with an abstract that begins "The Department of Defense (DOD) did not adequately implement key provisions of the Improper Payments Information Act of 2002 (IPIA) and the Improper Payments Elimination and Recovery Act of 2010 (IPERA) and Office of Management and Budget (OMB) requirements for fiscal year 2011. Most important, GAO found that DOD's improper payment estimates reported in its fiscal year 2011 Agency Financial Report were neither reliable nor statistically valid because of long-standing and pervasive financial management weaknesses and significant deficiencies in the department's procedures to estimate improper payments. For example, DOD did not"
Date: May 13, 2013
Creator: United States. Government Accountability Office.
Partner: UNT Libraries Government Documents Department

DOD Financial Management: Challenges in Attaining Audit Readiness and Improving Business Processes and Systems

Description: Testimony issued by the Government Accountability Office with an abstract that begins "GAO’s recent work highlights the types of challenges facing the Department of Defense (DOD) as it strives to attain audit readiness and reengineer its business processes and systems. The urgency in addressing these challenges has been increased by the goals of an auditable DOD Statement of Budgetary Resources (SBR) by the end of fiscal year 2014 and a complete set of auditable financial statements by the end of fiscal year 2017. For example, GAO’s 2011 reporting highlights difficulties the DOD components experienced in attempting to achieve an auditable SBR. These include:"
Date: April 18, 2012
Creator: United States. Government Accountability Office.
Partner: UNT Libraries Government Documents Department

DOD Financial Management: Implementation Weaknesses in Army and Air Force Business Systems Could Jeopardize DOD's Auditability Goals

Description: A letter report issued by the Government Accountability Office with an abstract that begins "DOD has invested billions of dollars and will invest billions more to develop and implement its ERPs. The ERPs play a key role in DOD’s goal of audit readiness by fiscal year 2017. Furthermore, in light of the Secretary of Defense’s decision that the Statement of Budgetary Resources is to be audit ready by fiscal year 2014, it is critical that DOD effectively implement the ERPs to support its auditability goals."
Date: February 28, 2012
Creator: United States. Government Accountability Office.
Partner: UNT Libraries Government Documents Department

DOD Financial Management: Challenges in the Implementation of Business Systems Could Impact Audit Readiness Efforts

Description: A publication issued by the Government Accountability Office with an abstract that begins "As one of the largest and most complex organizations in the world, the Department of Defense (DOD) faces many challenges in resolving its long-standing financial and related business operations and system problems. DOD is in the process of implementing modern multifunction enterprise resource planning (ERP) systems to replace many of its outdated legacy systems. The ERPs are intended to perform business-related tasks such as general ledger accounting and supply chain management. Modernizing DOD's business systems is a critical part of transforming the department's business operations, addressing high-risk areas, and providing more-accurate and reliable financial information to Congress on DOD's operations. The Panel requested that GAO provide its perspective on DOD's ERP implementation efforts and the impact implementation problems could have on DOD's efforts to improve financial management and be audit ready by fiscal year 2017. This statement is based on GAO's prior work, reports issued by the Department of Defense Inspector General (DOD IG), and GAO's ongoing oversight of selected DOD ERP efforts. Over the years, GAO has made numerous recommendations to improve the department's financial management operations."
Date: October 27, 2011
Creator: United States. Government Accountability Office.
Partner: UNT Libraries Government Documents Department

DOD Financial Management: Integrated Approach, Accountability, and Incentives Are Keys to Effective Reform

Description: Testimony issued by the General Accounting Office with an abstract that begins "The results of the Defense Department (DOD) financial audit for fiscal year 2000 highlight long-standing financial management weaknesses that continue to plague the military. These weaknesses not only hamper the department's ability to produce timely and accurate financial management information but also unnecessarily increase the cost of carrying out its missions. Although DOD has made incremental improvement, it has a long way to go to overcome its long-standing, serious financial management weaknesses as part of a comprehensive, integrated reform of the department's business support operations. Such an overhaul must include not only DOD's financial management and other management challenges but also its high-risk areas of information technology and human capital management. Personnel throughout the department must share the common goal of reforming the department's business support structure. Without reengineering, DOD will have little chance of radically improving its cumbersome and bureaucratic processes."
Date: May 8, 2001
Creator: United States. General Accounting Office.
Partner: UNT Libraries Government Documents Department

DOD Financial Management: Ongoing Challenges in Implementing the Financial Improvement and Audit Readiness Plan

Description: Testimony issued by the Government Accountability Office with an abstract that begins "The Department of Defense (DOD) has initiated several efforts over the years to address its long-standing financial management weaknesses and ultimately achieve unqualified (clean) opinions on its financial statements. In 2005, the DOD Comptroller first issued the Financial Improvement and Audit Readiness (FIAR) Plan for improving financial management and reporting. In May 2010, the DOD Comptroller issued the FIAR Guidance to provide standardized guidance to DOD components for developing Financial Improvement Plans (FIP) to implement the FIAR Plan. GAO's testimony focuses on (1) progress made by the DOD Comptroller in developing and issuing the FIAR Guidance, (2) challenges faced by DOD components in implementing the FIAR Guidance, and (3) improvements needed in DOD's oversight and monitoring of FIAR implementation efforts. This statement is based on four audits that were undertaken at the request of this subcommittee and other congressional requesters to evaluate the progress DOD is making in implementing its FIAR Plan and FIAR Guidance. GAO addresses findings and recommendations from two reports being issued this week (GAO-11-830 and GAO-11-851) and preliminary information from two ongoing audits. Each audit demonstrates some of the challenges DOD faces in improving its financial management and achieving the goal of auditable financial statements by 2017.."
Date: September 15, 2011
Creator: United States. Government Accountability Office.
Partner: UNT Libraries Government Documents Department

DOD Financial Management: The Army Faces Significant Challenges in Achieving Audit Readiness for Its Military Pay

Description: A letter report issued by the Government Accountability Office with an abstract that begins "The Army could not readily identify the population of Army military payroll accounts given its existing procedures and systems. The Army and DFAS-IN did not have an effective, repeatable process for identifying the population of active duty payroll records. For example, it took 3 months and repeated attempts before DFAS-IN could provide a population of service members who received active duty Army military pay in fiscal year 2010. Further, because the Army does not have an integrated military personnel and payroll system, it was necessary to compare the payroll file to active Army personnel records. However, the Defense Manpower Data Center (DMDC), DOD’s central repository for information on DOD-affiliated personnel, did not have an effective process for comparing military pay account files with military personnel files to identify a valid population of military payroll transactions. It took DMDC over 2 months and labor-intensive research to compare and reconcile the total number of fiscal year 2010 active duty payroll accounts to its database of personnel files. DOD’s Financial Improvement and Audit Readiness (FIAR) Guidance states that identifying the population of transactions is a key task essential to achieving audit readiness. Without effective processes for identifying the population of Army military pay records and comparing military pay accounts to personnel records, the Army will have difficulty meeting DOD’s 2014 audit readiness goal for the Statement of Budgetary Resources."
Date: March 22, 2012
Creator: United States. Government Accountability Office.
Partner: UNT Libraries Government Documents Department

DOD Financial Management: Numerous Challenges Must Be Addressed to Improve Reliability of Financial Information

Description: Testimony issued by the Government Accountability Office with an abstract that begins "As one of the largest and most complex organizations in the world, the Department of Defense (DOD) faces many challenges in resolving serious problems in its financial management and related business operations and systems. DOD is required by various statutes to (1) improve its financial management processes, controls, and systems to ensure that complete, reliable, consistent, and timely information is prepared and responsive to the financial information needs of agency management and oversight bodies, and (2) produce audited financial statements. Over the years, DOD has initiated numerous efforts to improve the department's financial management operations and achieve an unqualified (clean) opinion on the reliability of its reported financial information. These efforts have fallen short of sustained improvement in financial management or financial statement auditability. The Subcommittee has asked GAO to provide its perspective on the status of DOD's financial management weaknesses and its efforts to resolve them; the challenges DOD continues to face in improving its financial management and operations; and the status of its efforts to implement automated business systems as a critical element of DOD's Financial Improvement and Audit Readiness strategy."
Date: July 27, 2011
Creator: United States. Government Accountability Office.
Partner: UNT Libraries Government Documents Department

DOD Financial Management: Numerous Challenges Must Be Addressed to Achieve Auditability

Description: Testimony issued by the Government Accountability Office with an abstract that begins "As one of the largest and most complex organizations in the world, the Department of Defense (DOD) faces many challenges in resolving serious problems in its financial management and related business operations and systems. DOD is required by various statutes to (1) improve its financial management processes, controls, and systems to ensure that complete, reliable, consistent, and timely information is prepared and responsive to the financial information needs of agency management and oversight bodies, and (2) produce audited financial statements. Over the years, DOD has initiated numerous efforts to improve the department's financial management operations and achieve an unqualified (clean) opinion on the reliability of its reported financial information. These efforts have fallen short of sustained improvement in financial management or financial statement auditability. The Panel requested that GAO provide its perspective on the status of DOD's financial management weaknesses and its efforts to resolve them; the challenges DOD continues to face in improving its financial management and operations; and the status of its efforts to implement automated business systems as a critical element of DOD's Financial Improvement and Audit Readiness strategy."
Date: July 28, 2011
Creator: United States. Government Accountability Office.
Partner: UNT Libraries Government Documents Department

DOD Financial Management: Integrated Approach, Accountability, Transparency, and Incentives Are Keys to Effective Reform

Description: Testimony issued by the General Accounting Office with an abstract that begins "Financial management problems at the Department of Defense (DOD) are complex, long-standing, and deeply rooted throughout its business operations. DOD's financial management deficiencies represent the single largest obstacle to achieving an unqualified opinion on the U.S. government's consolidated financial statements. So far, none of the military services or major DOD components have passed the test of an independent financial audit because of pervasive weaknesses in financial management systems, operations, and controls. These problems go back decades, and earlier attempts at reform have been unsuccessful. DOD continues to rely on a far-flung, complex network of finance, logistics, personnel, acquisition, and other management information systems for financial data to support day-to-day management and decision-making. This network has evolved into an overly complex and error-prone operation with (1) little standardization across DOD components, (2) multiple systems performing the same tasks, (3) the same data stored in multiple systems, (4) manual data entry into multiple systems, and (5) a large number of data translations and interfaces, which combine to exacerbate problems with data integrity. Many of the elements that are crucial to financial management reform and business process transformation--particularly those that rely on long-term systems improvements--will take years to fully implement."
Date: March 6, 2002
Creator: United States. General Accounting Office.
Partner: UNT Libraries Government Documents Department

DOD Financial Management: More Reliable Information Key to Assuring Accountability and Managing Defense Operations More Efficiently

Description: Testimony issued by the General Accounting Office with an abstract that begins "Pursuant to a congressional request, GAO discussed the steps needed to improve financial management at the Department of Defense (DOD), focusing on: (1) the impact of financial management weaknesses on DOD's ability to efficiently and economically carry out its operations; (2) efforts DOD has initiated, and additional actions that are necessary, to improve financial management systems and controls in the short term; and (3) enhancements needed in updating DOD's Biennial Financial Management Improvement Plan--its long-term blueprint for financial management reform."
Date: April 14, 1999
Creator: United States. General Accounting Office.
Partner: UNT Libraries Government Documents Department

DOD Financial Management: Integrated Approach, Accountability, Transparency, and Incentives Are Keys to Effective Reform

Description: Testimony issued by the General Accounting Office with an abstract that begins "Financial management problems at the Department of Defense (DOD) are complex, long-standing, and deeply rooted throughout its business operations. DOD's financial management deficiencies represent the single largest obstacle to achieving an unqualified opinion on the U.S. government's consolidated financial statements. So far, none of the military services or major DOD components have passed the test of an independent financial audit because of pervasive weaknesses in financial management systems, operations, and controls. These problems go back decades, and earlier attempts at reform have been unsuccessful. DOD continues to rely on a far-flung, complex network of finance, logistics, personnel, acquisition, and other management information systems for financial data to support day-to-day management and decision-making. This network has evolved into an overly complex and error-prone operation with (1) little standardization across DOD components; (2) multiple systems performing the same tasks; (3) the same data stored in multiple systems; (4) manual data entry into multiple systems; and (5) a large number of data translations and interfaces, which combine to exacerbate problems with data integrity. Many of the elements that are crucial to financial management reform and business process transformation--particularly those that rely on long-term systems improvements--will take years to fully implement."
Date: March 20, 2002
Creator: United States. General Accounting Office.
Partner: UNT Libraries Government Documents Department

DOD Financial Management: Important Steps Underway But Reform Will Require a Long-term Commitment

Description: Testimony issued by the General Accounting Office with an abstract that begins "The Department of Defense (DOD) faces complex financial and management problems that are deeply rooted in DOD's business operations and management culture. During the past 12 years, DOD has begun several broad-based departmentwide reform efforts to overhaul its financial operations and other key business areas. These efforts have been unsuccessful. GAO identified several key elements that are essential to the success of any DOD financial management reform effort. These include (1) addressing the department's financial management challenges as part of a comprehensive, integrated, DOD-wide business reform; (2) providing for sustained leadership and resource control to implement needed reforms; (3) establishing clear lines of responsibility, authority, and accountability for such reform; (4) incorporating results-oriented performance measures and monitoring tied to the reforms; (5) providing appropriate incentives or consequences for action or inaction; (6) establishing and implementing an enterprise architecture to guide and direct financial management and modernization investments, and (7) ensuring effective oversight and monitoring."
Date: June 4, 2002
Creator: United States. General Accounting Office.
Partner: UNT Libraries Government Documents Department