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Friday, September 01, 2006

DoD Financial Management Improves, But Problems Remain - 31 Aug 2006

"AccountingWEB.com - August 31, 2006 - Dozens of Army reservists and National Guardsmen received checks totaling more than $900,000, despite failing to report for duty, according to Congressional investigators.

A separate investigation found that the Pentagon has issued checks to the deceased former spouses of military retirees.

Payment problems are just part of the huge financial management challenges faced by an agency as large as the U.S. Department of Defense (DoD). DoD has assets and liabilities that exceed those of Exxon, IBM, Ford and Wal-Mart combined, Government Computer News reported. Its operating budget is more than $400 billion. Improvements, considering the number of players and layers of bureaucracy involved, can take years.

The House Government Reform Committee has been scrutinizing military payroll systems, asking GAO to probe complaints that some troops have been underpaid, that their checks have been delayed, and other problems. The Senate is also pressuring DoD to improve.

The country’s top auditor, Comptroller General of the United States David Walker, noted progress at a recent Senate hearing. He pointed to DoD’s development of a plan to improve financial practices and its work on computer modernization, Government Computer News reported.

The department says it has modernized 200 business systems, saving $1 million with each upgrade. Also, 95 percent of DoD’s vendor payments now are done electronically, up from 86 percent in 2001, saving more than $6 million.

“The approach that they are taking now is vastly superior to the approach that they were taking before,” Walker told lawmakers."

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