The Defense Department inspector general is calling into question an Army Materiel Command implementation of a $1.1 billion enterprise resource planning effort known as the Logistics Modernization Program.
LMP is an installation of SAP software by Computer Sciences Corp, which began work in December 1999. The inspector general says, in a report dated Nov. 2, that the system doesn't record financial data at the transaction level, meaning that the Army Working Capital Fund cannot receive an unqualified audit opinion.
Defense Department accounting is notoriously messy, with auditors unable to reconcile DoD or military service financial statements. The department says it can have clean books by 2017, provided that auditing guidelines are modified.
Because the service will have to spend additional money on top of the $1.1 billion it already spent on LMP through fiscal 2009 to capture transactional data, report author Mary Ugone, deputy inspector general for auditing, recommended that the Army suspend further deployment of LMP. It's a recommendation that the Pentagon comptroller and the deputy chief management officer disagreed with and CSC announced on Nov. 3 the third and final phase of LMP implementation.
Ugone also recommended that the Pentagon conduct an analysis of alternatives to determine whether it might be more cost-effective to cancel LMP and look at alternative solutions in order "to obtain DoD compliance with the U.S. Government Standards General Ledger requirements." That's also a recommendation that the comptroller and deputy chief management officer disagreed with.
However, Pentagon officials did say they will ponder the future direction of LMP and issue an acquisition decision memorandum. A September meeting of the DoD investment review board also required the Army to come up with an overall Army ERP strategy by this December, the report states.
LMP will be subject to a review by the Office of Management and Budget as part of an evaluation of federal financial management system projects, the report adds.
-David Perera, FierceGovernmentIT.com
- download the report, D-2011-015 (.pdf)