DOD Business Systems Modernization: Continued Investment in Key Accounting Systems Needs to be Justified
GAO-03-465
Published: Mar 28, 2003. Publicly Released: Mar 31, 2003.
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Highlights
The Department of Defense's (DOD) long-standing financial management and business systems modernization problems result in a lack of information needed to make sound decisions, hinder the efficiency of operations, and leave the department vulnerable to fraud, waste, and abuse. Such problems led us in 1995 to put financial management and business systems modernization at DOD on our list of high risk areas in the federal government, a designation that continues today. GAO was asked to (1) provide information on the number and cost of DOD's current business systems and (2) determine if DOD is effectively managing and overseeing selected accounting system investments.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | The Secretary of Defense should direct the Under Secretary of Defense (Comptroller) to limit funding in the DFAS Corporate Database/Corporate Warehouse, the Defense Standard Disbursing System, and the Defense Departmental Reporting System until the DOD Comptroller, in collaboration with the Assistant Secretary of Defense (Command, Control, Communications & Intelligence), and the Director, Program Analysis and Evaluation, demonstrates on the basis of credible analysis and data that continued investment in these three projects will produce benefits that exceed costs. |
The fiscal year 2005 defense authorization act directed the Department of Defense to, among other things, establish an investment structure and review process and approve and certify system modernizations in excess of $1 million. In response to the act, DOD established four investment review boards (IRBs) that are tasked with the review and certification of business system modernizations. In addition, on June 2, 2005, DOD issued guidance that provides for these boards to review all business system investments at least annually, and certify defense business system modernizations costing over $1 million, as required by the act. With respect to the three systems noted in our recommendation, the Defense Standard Disbursing System (DSDS) was terminated, while the other two systems were reviewed by the IRBs and approved by the Defense Business Systems Management Committee in September 2005, in accordance with the act and the intent of our recommendation.
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| Department of Defense | The Secretary of Defense should, in light of the department's ongoing efforts to modernize its business systems, direct the Under Secretary of Defense (Comptroller) to evaluate all remaining DFAS information technology projects and ensure that each project is being implemented at acceptable costs, within reasonable time frames, and is contributing to tangible, observable improvements in mission performance |
The Congress included provisions in the defense authorization act for fiscal year 2005 that required the Department of Defense to, among other things, establish an investment structure and review process and approve and certify system modernizations in excess of $1 million. In addition, the act required reviews of all business systems annually. In response to the act, DOD established four investment review boards (IRBs) that are tasked with the review and certification of business system modernizations. In addition, on June 2, 2005, DOD issued guidance that provides for these boards to review all business system investments, at least annually, and certify defense business system modernizations costing over $1 million, as required by the act. These actions meet the intent of our recommendation.
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Topics
Cost analysisDefense economic analysisDefense operationsFinancial managementFinancial management systemsEconomic analysisU.S. ArmyU.S. Air ForceBusiness systems modernizationChief information officers