The Defense Department's books are in bad shape. The Pentagon and the military services can't reliably and accurately account for what they spend in the same way other government agencies can, despite a 1994 law that requires everyone in the federal circus to produce consistent, standard findings about their financial affairs. But Pentagon officials assured a Senate panel on Thursday that they'll get there too, at some point.
DoD Comptroller Robert Hale and top leaders from the military services told a Senate Homeland Security subcommittee that the Pentagon will be audit-ready by its congressionally imposed deadline of 2017. That may not mean that when that new fiscal year begins the department can immediately begin an audit, though -- Hale acknowledged that it may take years after confirming its readiness before there's an actual audit for the Defense Department. Massachusetts Sen. Scott Brown mused that it might be more realistic to expect DoD's first audit by 2020 or even 2025.
Of course, few of the senior leaders in the Building will still be around then, and it'll be up to Secretary Panetta's successors to keep up the emphasis on this for it to actually happen. Hale, the service witnesses and Asif Khan, director of financial management and assurance for the Government Accountability Office's, told senators that emphasis from leadership is one of the most important factors in actually getting DoD to get its books in order.
Hale told the subcommittee chairman, Delaware Sen. Tom Carper, that for many years, DoD just did not take the 1994 CFO Act seriously. Today, however, Panetta has said he wants the Pentagon to try to be ready for an audit before its current 2017 deadline, and Hale said he briefed Panetta about that effort on the secretary's first day in office. The service witnesses all were careful to affirm that their chiefs, secretaries and senior leaders also were on board with preparing for audit readiness, and they were telling everyone in their services to get on board, not just bean-counters.
Despite all the positive vibes, DoD and the services still have some major problems in getting their act together, Kahn said. He issued a full report on DoD's audit challenges in addition to his hearing testimony, and it's eye-opening if you want to get into this green-eyeshade stuff. The services can't fully track cash they've spent; they can't figure out which agencies are responsible for which jobs; and in at least one instance, they won't physically be able to accomplish all the piece-work needed to build a coherent picture of what they take in and pay out.
Approximately two-thirds of invoice and receipt data must be manually entered into [the General Fund Enterprise Business System] from the invoicing and receiving system (i.e., Wide Area Work Flow). DFAS personnel stated that manual data entry will eventually become infeasible due to increased quantities of data that will have to be manually entered as GFEBS is deployed to additional locations. Army officials acknowledged that there is a problem with the Wide Area Work Flow and GFEBS interface and that this problem reduced the effectiveness of GFEBS, and that they are working with DOD to resolve the problem.Still, despite all this, Khan said he thought DoD was making progress from where it's been, and Carper said there was a new, positive spirit at Thursday's hearing, compared to ones he's convened before. He also vowed that his desire to push DoD toward its audit goal would not go away.