DOD Financial Management:

More Reliable Information Key to Assuring Accountability and Managing Defense Operations More Efficiently

T-AIMD/NSIAD-99-145: Published: Apr 14, 1999. Publicly Released: Apr 14, 1999.

Additional Materials:


Lisa G. Jacobson
(202) 512-9542


Office of Public Affairs
(202) 512-4800

Pursuant to a congressional request, GAO discussed the steps needed to improve financial management at the Department of Defense (DOD), focusing on: (1) the impact of financial management weaknesses on DOD's ability to efficiently and economically carry out its operations; (2) efforts DOD has initiated, and additional actions that are necessary, to improve financial management systems and controls in the short term; and (3) enhancements needed in updating DOD's Biennial Financial Management Improvement Plan--its long-term blueprint for financial management reform.

GAO noted that: (1) DOD primarily relies on various logistical systems to carry out its important stewardship responsibility over an estimated $1 trillion in physical assets; (2) these systems are the primary source of information for: (a) maintaining visibility over assets to meet military objectives and readiness goals; and (b) financial reporting; (3) however, these systems have material weaknesses that, in addition to hampering financial reporting, impair DOD's ability to: (a) maintain central visibility over its assets; (b) safeguard assets from physical deterioration, theft, or loss; and (c) prevent the purchase of assets already on hand; (4) these weaknesses can seriously diminish the efficiency and economy of the military services' support operations; (5) in response to this problem, the department initiated programs or renewed its emphasis on implementing existing measures that would improve asset visibility and tracking; (6) in addition, DOD renewed its Total Asset Visibility initiative to provide department-level access to timely, accurate information on the status, location, and movement of its personnel, equipment and supplies--including weapon systems, secondary inventory, and ammunition; (7) DOD Comptroller has been developing and implementing short-term steps in collaboration with DOD's functional and audit communities, the Office of Management and Budget, and GAO; (8) several of the actions included in DOD's short-term plan, along with additional short-term actions necessary to provide a solid foundation for the department's financial management improvement efforts, include: (a) ensuring feeder system data accuracy; (b) implementing accounting policy procedures; (c) instilling fundamental controls; and (d) training financial management personnel; (9) DOD's Biennial Plan represents a significant landmark because it includes a discussion of the importance of the programmatic functions of personnel, acquisition, property management, and inventory management to the department's ability to support consistent, accurate information flows to all information users; (10) modifications to the plan are needed if DOD is to achieve the full range of reforms needed; and (11) to accomplish this, DOD's planned update should include: (a) a revised concept of operations to reflect the full range of DOD's financial management operations; (b) specific plans on shared servicing and outsourcing strategies; and (c) concepts established in the Clinger-Cohen Act for effectively implementing the technology initiatives contained in the plan.

Sep 10, 2020

Sep 9, 2020

Aug 25, 2020

Aug 6, 2020

Jun 17, 2020

Jun 10, 2020

Jun 8, 2020

May 21, 2020

Mar 31, 2020

Looking for more? Browse all our products here