DOD Financial Management

What Needs to Be Done | Key Reports

Since the first financial statement audit of a major DOD component was attempted almost 20 years ago, GAO has reported that weaknesses in DOD business operations not only adversely affect the reliability of reported financial data, but also the economy, efficiency, and effectiveness of these operations.

  • DOD's continued financial and related business management and system deficiencies hinder its ability to control costs, ensure basic accountability, anticipate future costs and claims on the budget, measure performance, and maintain funds control. Such problems led us in 1995 to put DOD financial management on our list of high-risk areas in the federal government—a designation that continues today.

    Highlights of GAO-08-1063 (PDF), Highlights of GAO-08-462T (PDF), Highlights of GAO-09-271 (PDF)

  • None of the military services have received favorable audit opinions on their financial statements, and the department has acknowledged that long-standing pervasive weaknesses in its business systems, processes, and controls have prevented auditors from determining the reliability of reported financial statement information.

    Highlights of GAO-08-1063 (PDF), Highlights of GAO-8-926T (PDF), Highlights of GAO-07-607T (PDF)

  • Transforming DOD's financial management operations to provide reliable, accurate, and useful information for management operations, including financial reporting, analysis, and decision making, is a significant challenge.

    Highlights of GAO-08-132T (PDF)

^ Back to topWhat Needs to Be Done

Over the years, DOD has initiated numerous efforts to improve its capabilities to efficiently and effectively support management decision making and reporting, with little success. Key to successful transformation will be DOD's ability to

  • implement a multifaceted, cross-organizational approach for transforming the department's business operations that addresses the contribution and alignment of key elements, including strategic plans, people, processes, and technology;

    Highlights of GAO-08-866 (PDF), Highlights of GAO-08-132T (PDF)

  • develop and implement a comprehensive and integrated financial management transformation strategy, within an overall business transformation strategy, to guide financial management improvement efforts; prioritize initiatives and resources; and monitor progress through the establishment and utilization of performance goals, objectives, and metrics;

    Highlights of GAO-07-860 (PDF), Highlights of GAO-08-866 (PDF), Highlights of GAO-08-462T (PDF), Highlights of GAO-08-132T (PDF)

  • improve business system investment governance and oversight processes and controls to support portfolio-based management of selected business systems that are intended to provide a specific capability, such as asset visibility, using indicators such as costs, schedule, performance, and risks;

    Highlights of GAO-07-860 (PDF), Highlights of GAO-08-132T (PDF)

  • develop and implement business systems that individually or collectively achieve financial management transformation objectives and provide DOD with accurate, timely, reliable, and useful financial management information on the results of its operations that can be used for management analysis, decision making, reporting, and congressional oversight; and

    Highlights of GAO-07-860 (PDF), Highlights of GAO-08-132T (PDF)

  • implement best practices to achieve efficiencies and improve the effectiveness of the department's business processes.

    Highlights of GAO-07-860 (PDF), Highlights of GAO-08-866 (PDF), Highlights of GAO-08-132T (PDF)

^ Back to topKey Reports

DOD Financial Management: Improvements Are Needed in Antideficiency Act Controls and Investigations
GAO-08-1063, September 26, 2008
Summary (HTML)   Highlights Page (PDF)   Full Report (PDF, 44 pages)   Accessible Text   Recommendations (HTML)
DOD Business Transformation: Air Force's Current Approach Increases Risk That Asset Visibility Goals and Transformation Priorities Will Not Be Achieved
GAO-08-866, August 8, 2008
Summary (HTML)   Highlights Page (PDF)   Full Report (PDF, 40 pages)   Accessible Text   Recommendations (HTML)
Fiscal Year 2007 U.S. Government Financial Statements: Sustained Improvement in Financial Management Is Crucial to Improving Accountability and Addressing the Long-Term Fiscal Challenge
GAO-08-926T, June 26, 2008
Summary (HTML)   Highlights Page (PDF)   Full Report (PDF, 45 pages)   Accessible Text
DOD Business Transformation: Lack of an Integrated Strategy Puts the Army's Asset Visibility System Investments at Risk
GAO-07-860, July 27, 2007
Summary (HTML)   Highlights Page (PDF)   Full Report (PDF, 66 pages)   Accessible Text   Recommendations (HTML)
GAO Contact
portrait of Asif Khan

Asif Khan

Director, Financial Management and Assurance

khana@gao.gov

(202) 512-9869