DOD Financial Management:

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

GAO-12-134: Published: Feb 28, 2012. Publicly Released: Mar 29, 2012.

Additional Materials:

Contact:

Asif A. Khan
(202) 512-3000
khana@gao.gov

 

Nabajyoti Barkakati
(202) 512-4499
barkakatin@gao.gov

 

Office of Public Affairs
(202) 512-4800
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What GAO Found

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.

Assessments by independent agencies of the Army’s General Fund Enterprise Business System (GFEBS) and the Global Combat Support System and the Air Force’s Defense Enterprise and Accounting Management System (DEAMS) and Expeditionary Combat Support System identified operational problems, such as deficiencies in data accuracy, inability to generate auditable financial reports, and the need for manual workarounds. Further, according to DFAS users, GFEBS and DEAMS did not provide all expected capabilities in accounting and decision support. For example:

  • Approximately two-thirds of invoice and receipt data must be manually entered into GFEBS from the invoicing and receiving system due to interface problems. Army officials explained that the primary cause of the problem is that the interface specification that GFEBS is required by DOD to use does not provide the same level of functionality as the interface specification used by the legacy systems. At the time of our review, Army officials stated that they are working with DOD to resolve the problem, but no time frame for resolution had been established.

  • DEAMS cannot produce the monthly accounts receivable aging report as intended. The DEAMS Financial Management Office is aware of the problems and is in the process of resolving them. However, at the time of our review, no timetable had been set for the problems’ resolution.

DOD oversight authority has limited the deployment of GFEBS and DEAMS based upon the results of the independent assessments. Continued monitoring of DOD ERPs is essential to identify system weaknesses and to help ensure that the systems provide the promised capabilities. Without timely and effective corrective action, the department is at risk of making investment and system deployment decisions that may not provide the desired results—improvements in the department’s business operations.

According to DFAS personnel, the training they received for GFEBS and DEAMS did not fully meet their needs. DFAS personnel informed us that the training focused on an overview of GFEBS and DEAMS and how the systems were supposed to operate. While this was beneficial in identifying how GFEBS and DEAMS were different from the existing legacy systems, the training focused too much on concepts rather than the skills needed for DFAS users to perform their day-to-day operations.

Why GAO Did This Study

The Department of Defense (DOD) has stated that successful implementation of its enterprise resource planning (ERP) systems is critical to DOD’s auditability goals. An ERP is an automated system that performs a variety of business-related functions. The National Defense Authorization Act for Fiscal Year 2010 mandates that DOD be able to validate its financial statements as audit ready by September 30, 2017. GAO has previously reported that DOD has not effectively employed acquisition management controls to help ensure that the ERPs deliver the promised capabilities on time and within budget. GAO was asked to determine issues being encountered by the Army and the Air Force in the implementation of selected ERPs. GAO reviewed independent assessments and reports and interviewed the systems’ users and program management office officials.

What GAO Recommends

GAO is making five recommendations to the Secretary of Defense to ensure the correction of system problems prior to further system deployment, including user training. DOD concurred with four and partially concurred with one of the recommendations and described its efforts to address them.

For more information, contact Asif A. Khan at (202) 512-9869 or khana@gao.gov or Nabajyoti Barkakati at (202) 512-4499 or barkakatin@gao.gov.

Recommendations for Executive Action

  1. Status: Open

    Comments: In commenting on the draft report, DOD concurred with the recommendation and cited action(s) being taken by the Army to improve training for GFEBS users on actual job processes. We will follow-up with Army officials to (1) obtain and evaluate documentation and (2) determine whether the Army has taken sufficient action to address this recommendation.

    Recommendation: To help provide for the successful implementation of Army and Air Force ERPs, and to help ensure that DFAS users have the training needed, the Secretary of Defense should direct the Secretary of the Army to improve training for GFEBS users by providing training on actual job processes in a manner that allows users to understand how the new processes support their job responsibilities and the work they are expected to perform.

    Agency Affected: Department of Defense

  2. Status: Open

    Comments: In commenting on the draft report, DOD concurred with the recommendation and cited action(s) being taken by the Air Force to ensure that time lines are established and monitored for those issues identified by DFAS that are impacting their efficient and effective use of DEAMS. We will follow-up with Army officials to (1) obtain and evaluate documentation and (2) determine whether the Army has taken sufficient action to address this recommendation.

    Recommendation: To help provide for the successful implementation of Army and Air Force ERPs, and to help ensure that DFAS users have the training needed, the Secretary of Defense should direct the Secretary of the Air Force to ensure that time lines are established and monitored for those issues identified by DFAS that are impacting their efficient and effective use of DEAMS.

    Agency Affected: Department of Defense

  3. Status: Open

    Comments: In commenting on the draft report, DOD concurred with the recommendation and cited action(s) being taken by the Army to ensure that time lines are established and monitored for those issues identified by DFAS that are impacting their efficient and effective use of GFEBS. We will follow-up with Army officials to (1) obtain and evaluate documentation and (2) determine whether the Army has taken sufficient action to address this recommendation.

    Recommendation: To help provide for the successful implementation of Army and Air Force ERPs, and to help ensure that DFAS users have the training needed, the Secretary of Defense should direct the Secretary of the Army to ensure that time lines are established and monitored for those issues identified by DFAS that are impacting their efficient and effective use of GFEBS.

    Agency Affected: Department of Defense

  4. Status: Open

    Comments: In commenting on a draft of this report, DOD partially concurred with this recommendation. We will follow up with agency officials to determine what has been done.

    Recommendation: To help provide for the successful implementation of Army and Air Force ERPs, and to help ensure that Defense Finance and Accounting Service (DFAS) users have the training needed, the Secretary of Defense should direct that the Milestone Decision Authority (MDA) for GFEBS, Global Combat Support System-Army (GCSS-Army), DEAMS, and Expeditionary Combat Support System (ECSS) ensure that any future system deficiencies identified through independent assessments are resolved or mitigated prior to further deployment of the systems.

    Agency Affected: Department of Defense

  5. Status: Open

    Comments: In commenting on the draft report, DOD concurred with the recommendation and cited action(s) being taken by the Air Force to improve training for DEAMS users on actual job processes. We will follow-up with Army officials to (1) obtain and evaluate documentation and (2) determine whether the Army has taken sufficient action to address this recommendation.

    Recommendation: To help provide for the successful implementation of Army and Air Force ERPs, and to help ensure that DFAS users have the training needed, the Secretary of Defense should direct the Secretary of the Air Force to improve training for DEAMS users by providing training on actual job processes in a manner that allows users to understand how the new processes support their job responsibilities and the work they are expected to perform.

    Agency Affected: Department of Defense

 

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