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Monday, February 21, 2011

DoD on path to obtain clean books by 2017

Despite the Defense Department's poor track record of meeting deadlines for achieving audit readiness, the Pentagon is on a path to meeting what it believes is the current legislative deadline for producing demonstrably clean financial reports, the department's number two accountant said Friday.


The 2010 Defense authorization bill established a benchmark requiring all of DoD to be audit-ready by 2017, and unlike previous goals, that date is achievable, according to Mark Easton, the Pentagon's deputy chief financial officer.

He said the department's leadership now realizes that solving the problem doesn't simply boil down to having its financial experts do a better job.

"The way we're approached it before oftentimes gives you the impression that as a financial management community we can fix this ourselves," Easton told attendees at an Association of Government Accountants conference in Washington. "We've learned over time, probably the hard way and while probably not putting resources to the best use, that you really have to change the way that the organization does business. That's what we're trying to do in DoD. And we're talking about changing an economy--a very complex economy--that's in many cases bigger than a country." Easton said DoD's current effort to get the documentation of its finances aligned with various federal financial management requirements will require an approach that attempts to make it clear to all the department's dispersed pieces that each of them has a role in the process.


"Previous efforts have focused on things that don't resonate with the enterprise," he said. "People looked at the comptroller or the CFO or the resource manager and said, 'financial is someone else's job, audit is something you want to avoid.' The combination of those two things is not the right message when you're talking about financial auditability. Financial auditability says, 'I know my business and I'm ready to present it to a financial auditor.'"

DoD, which is responsible for more than half of the government's discretionary spending, has been on what Easton called a 20-year "journey" to achieve a clean audit.

-Jared Serbu, FederalNewsRadio.com
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