DOD Financial Management: Air Force Needs to Improve Its System Migration Efforts
Fast Facts
The Air Force uses two financial systems (one aging and one modern) that aren't fully integrated to manage its finances. This has made it difficult to obtain timely, accurate, and reliable information on its business operations.
Although the Air Force has deployed the modernized system in pieces since 2005, it hasn't created a migration plan to guide the transition from its existing system to the new one. Instead, the Air Force has used both systems simultaneously and plans to continue doing so for at least the next 10 years.
Our recommendations include developing a plan to migrate to the new accounting system sooner.
Highlights
What GAO Found
The Air Force relies on its financial management systems to help manage department operations and support core accounting activities, such as maintaining financial records and making payments. Its environment is complex and consists of multiple systems that are not fully integrated, preventing Air Force management from obtaining timely, accurate, and reliable information on the results of its business operations. To address these issues, the Air Force has been migrating from its legacy, or aging, financial management systems to more modern target systems. One such key target is the Defense Enterprise Accounting and Management System (DEAMS), which is to be the Air Force's core accounting and finance system. DEAMS has been deployed incrementally to Air Force users since 2005, and the Air Force plans to expand its use in the future (see figure).
Air Force's Defense Enterprise Accounting and Management System (DEAMS) Timeline
The Air Force has not followed leading practices, such as developing a migration plan to guide its transition from the existing legacy system to DEAMS. Instead, the Air Force decided to pursue a dual processing policy in which the legacy and target systems would both continue to operate for at least the next 10 years. The continued use of the legacy system means that resolution of its deficiencies would be delayed for many years. Further, associated internal control weaknesses would also persist.
Auditors have identified numerous issues related to the Air Force's broader financial management systems, including DEAMS. For fiscal year 2020, auditors reported deficiencies including nonintegrated Air Force financial systems, an insufficient financial reporting process, and a lack of controls in the design of information systems. While the Air Force has some efforts under way to address financial management system–related deficiencies, it does not have a comprehensive strategy encompassing the entirety of its financial management systems modernization efforts. Without such a comprehensive financial management system strategy, it will be more difficult for the Air Force to report accurate and reliable financial information. Moreover, the Air Force will continue to face difficulties developing and fully implementing Air Force–wide corrective action plans to address the system-related issues that auditors identified. These issues have led to the Air Force not being able to provide sufficient, appropriate audit evidence to support the reported amounts in its financial statements.
Why GAO Did This Study
The Air Force is currently modernizing and migrating its financial management systems as part of a broader effort to improve financial management operations and prepare auditable financial statements. Successful system migration is key to the Air Force addressing weaknesses that financial statement auditors have identified.
The Government Management Reform Act of 1994 includes a provision for GAO to audit the U.S. government's consolidated financial statements. This report examines the extent to which the Air Force is (1) following leading practices for its financial management system migration and (2) planning to address the financial management system–related issues that auditors identified.
GAO reviewed guidance on system migration leading practices; observed DEAMS program operations; reviewed documentation related to the Air Force's migration efforts and strategy, financial statement audit results, and efforts to resolve system deficiencies; and interviewed cognizant officials.
Recommendations
GAO is making four recommendations to the Air Force, including that it develop a migration plan to more timely transition to its target core accounting systems and develop a comprehensive strategy that includes all of its financial management systems modernization efforts. The Department of Defense agreed with all four recommendations and described actions taken or planned to address them.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of the Air Force |
Priority Rec.
The Assistant Secretary of the Air Force (Financial Management and Comptroller) should develop a systems migration plan based on leading migration practices to more timely transition from the Air Force's General Accounting and Finance System–Reengineered environment to the Defense Enterprise Accounting and Management System (DEAMS). (Recommendation 1) |
As of August 2024, the Department of the Air Force has partially addressed this recommendation. In October 2023, the Department of Defense (DOD) provided its September 2023 Air Force General Accounting and Finance System Migration Strategy and Plan (the plan). The plan was consistent with four of the leading migration practices described in our report and partially consistent with two of the practices. In particular, the plan was partially consistent with leading practices associated with training and informing users about transition tasks and workloads. For example, while the plan recognized the importance of training, it stated that the Air Force will develop the training content and the training schedule during the execution of the system migration. In addition, the plan provided general methods for informing users about transition tasks and workloads. However, the plan only documented high-level milestones for phase one of a three-phase migration. In June 2024, DOD provided a status update on the migration plan's training content, schedule, and milestones for the three migration phases. DOD stated that the migration training plan will be completed in Quarter 4 of fiscal year 2025 and the migration schedule with milestones for all three phases will be completed in Quarter 3 of fiscal year 2024. We will continue to follow-up with the Air Force and update the status of this recommendation as the department provides additional information.
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| Department of the Air Force | During future DEAMS upgrades, the Assistant Secretary of the Air Force (Financial Management and Comptroller) should minimize the number of reports, interfaces, conversions, and extensions modifications and instead maximize the centralized functionality and capabilities of the target accounting system to reengineer business processes. (Recommendation 2) |
As of August 2024, the Department of the Air Force has partially addressed this recommendation. In its June 2024 corrective action plan (CAP), the Air Force stated that it completed its CAP and provided supporting documentation, including a list of its reports, interfaces, conversions, and extensions (RICE) reductions associated with its system upgrade. According to the Air Force, the remaining RICE objects that were not removed support the integration of DEAMS with other DOD systems. However, the Air Force did not provide sufficient information about its efforts to maximize the centralized functionality and capabilities of the DEAMS target system to reengineer business processes to minimize customization of the system. We will follow-up with the Air Force for additional information and continue to monitor the status of this recommendation.
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| Department of the Air Force | The Assistant Secretary of the Air Force (Financial Management and Comptroller) should ensure that future financial management system version upgrades are planned to address identified deficiencies and provide functionality that promotes Air Force compliance with federal financial management systems requirements, applicable federal accounting standards, and the U.S. Standard General Ledger at the transaction level. (Recommendation 3) |
As of August 2024, the Department of the Air Force has not demonstrated that it has addressed this recommendation. In its June 2024 corrective action plan, the Air Force stated that it will perform a production software upgrade to the DEAMS application that provides functionality promoting Air Force compliance with federal financial management systems requirement and applicable federal accounting standards by the third quarter of fiscal year 2024. In addition, the Air Force stated that it will complete the implementation of Treasury G-Invoicing platform integration in the second quarter of fiscal year 2025. We will continue to monitor the Air Force's efforts to address this recommendation.
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| Department of the Air Force | The Assistant Secretary of the Air Force (Financial Management and Comptroller) should develop a comprehensive strategy with appropriate performance metrics and consideration of a concept of operations, for its entire financial management systems modernization effort in support of the financial statement audit. (Recommendation 4) |
As of August 2024, the Air Force has partially addressed this recommendation. In February 2024, the Air Force provided a Closure Request Memo for this recommendation and a corrective action plan (CAP) update, along with a detailed summary of steps taken to accomplish the CAP. In addition, the Air Force provided supporting documentation, such as the September 2021 Air Force Business Mission Area (BMA) Strategy Roadmap and the November 2021 BMA Strategy. The BMA Strategy defined specific goals and outcomes. However, the roadmap and strategy did not describe performance metrics for measuring the extent to which the Air Force is achieving intended outcomes, as called for by leading practices. Further, the Air Force documentation was focused on the BMA, which includes financial management systems, but the documentation did not clearly describe the relationship between the BMA strategy and a strategy for modernizing financial management systems. In addition, the Air Force did not provide a current concept of operations or demonstrate that the strategy considered a concept of operations as called for by this recommendation. In June 2024, the Air Force provided a corrective action plan update. In its written response, the Air Force cited efforts underway to help improve its financial management systems and cited one performance metric associated with financial management systems. However, it did not provide additional documentation about the efforts it cited or information to validate that the Air Force has documented and is monitoring the status of the metric. Further, the Air Force did not provide support that the BMA Strategy includes sufficient content associated with financial management systems. We will follow-up with the Air Force for additional information and continue to monitor the Air Force's actions to address this recommendation.
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