Defense Management Initiatives: Limited Progress in Implementing Management Initiatives

GAO discussed the Department of Defense's (DOD) Defense Business Operations Fund and the Corporate Information Management (CIM) initiative, focusing on: (1) DOD progress in implementing these two initiatives; and (2) the problems that DOD must resolve in order to achieve success. GAO noted that: (1) the Fund's primary goal is to identify and reduce the costs of DOD operations; (2) although DOD has made some progress in improving Fund operations, some tasks will take several more years to complete; (3) DOD has increased customers' budget requests by billions of dollars to recover the cost of materials and operations; (4) according to DOD pricing policy, current year prices are adjusted to recover prior year losses; (5) business-type financial reports could enhance reporting on Fund operations; (6) automated systems are key to improving DOD financial management operations; (7) CIM is intended to improve DOD business operations; (8) DOD needs a CIM strategic plan to articulate its goals and priorities; (9) the current CIM implementation approach produces marginal results; and (10) strong leadership is needed to ensure the success of DOD management initiatives.