Sequestration, budget cuts taking their toll on DoD financial managers

Unprecedented chaos in the federal budget, impending civilian furloughs and an increasing workload are all contributors to a sharp, sudden decline in the morale of the staff that manages and executes the Defense Department's budget, according to an annual workforce survey released Wednesday.

The study, prepared by the American Society of Military Comptrollers and Grant Thornton, found that out of more than 1,000 financial management professionals surveyed, senior government executives were most likely to report a decline in morale. Within that group, 86 percent of respondents said they enjoyed their jobs "a lot" in last year's survey. By this year, the figure had plummeted to 53 percent. Lower-level financial managers reported a similar, though smaller decline in morale: 20 percent reported high job satisfaction compared to 24 percent in 2012.

With respect to budget uncertainty, the survey reflects deep dissatisfaction with the inflexibility of the across-the-board budget cuts under sequestration, the fact that the government seems to be in a perpetual state of continuing resolutions rather than full-year appropriations, and the ongoing indecision in the political arena about whether sequestration is here to stay.

Among the most senior members of the financial management workforce, the survey also revealed deep pessimism about DoD's ability to meet its Congressional mandates to assemble its financial statements so that they can be scrutinized by independent auditors. The survey found 23 percent of senior executives admitted they have zero confidence that their respective organizations will be audit-ready by the 2014 deadline for DoD to undergo a partial audit. Only three percent said they were "highly confident" that their organization would be prepared.

-Jared Serbu, FederalNewsRadio.com

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Experts discuss DoD's challenges in reaching a clean audit

2013 represents 18 years on the High Risk List for the Defense Department. DoD has a 2017 deadline for a clean audit, but it's also required to make interim progress by 2014.

On this week's edition of Pentagon Solutions, Francis discusses whether the Pentagon will meet those deadlines and the challenges it has in meeting them.

Francis' guests today include:

• Al Tucker, former deputy chief financial officer at the Department of Defense; former deputy assistant inspector general for audit in the Office of the Inspector General at the Department of Defense, and former executive director of the American Society of Military Comptrollers
• Asif Khan, director of financial management and assurance at the Government Accountability Office

-FederalNewsRadio.com
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Pentagon at 'midfield' in bid for clean books, officials say

Invoking a Washington Redskins football metaphor, Pentagon Comptroller Robert Hale said the Defense Department is at “midfield” in its effort to meet deadlines for auditability of its financial statements, “but we’ve just got Robert Griffin III, and we’ve got the ball and we’ve got momentum,” he told a House panel Friday.

The department and all the military services are struggling to meet a congressional requirement for clean books by 2017, along with a tighter deadline of 2014 laid down by Defense Secretary Leon Panetta. At a hearing before the House Armed Services Oversight and Investigations Subcommittee, Chairman Rob Wittman, R-Va., asked five top officials for progress reports on the efforts of a department with, he noted, $700 billion in net operating costs and $12 trillion in assets.

Hale said he was “reasonably confident” of meeting the twin goals, but added he could make no guarantees. “We’ve been humbled by what’s coming in the next two years, and we’ve overpromised and underdelivered before,” he said. But Congress, he added pointedly, has “sapped some of the time we have for achieving readiness” with its continuing budget stalemate, which has required Hale and his team to execute “four shutdown drills and plan for things that don’t end up happening.”

Asked whether he favored the Audit the Pentagon Act sponsored by Sen. Tom Coburn, R-Okla., which, among other provisions, would threaten to move Defense auditing functions to the Treasury Department, Hale said he did not. “It would have the opposite effect than intended,” he said, saying Defense employees need such day-to-day operations in-house.

Hale and other witnesses noted that sections of each of the services have achieved audit readinesses, mentioning the Defense Information Systems Agency, the Defense Contract Audit Agency, the Army Corps of Engineers and several specific programs. The Marines are viewed as a model in the effort.
Charles S. Clark, GovExec.com
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IG: DoD may miss audit deadlines because of delays in system upgrades

The Defense Department could miss deadlines for improving its financial audits because of delays in six modernization projects affecting financial management, logistics and other areas, the agency’s inspector general said in a report released Monday.


Those projects — known as enterprise resource planning systems — have collectively experienced $8 billion in cost overruns and schedule delays of a year-and-a-half or more in development and implementation, the report said (PDF).

Besides cutting into hoped-for cost savings, the delays increase the odds that the Pentagon will not meet a statutory September 2017 target for passing a full financial audit. Defense Secretary Leon Panetta’s 2014 goal of successfully completing a budget audit — one of four steps involved in meeting the full audit-readiness goal — is also at growing risk, the report said.


-Sean Reilly, FederalTimes.com
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FederalNewsRadio's Daily DOD Report

The Pentagon is trying to balance national security with a tough financial reality. The American Society of Military Comptrollers says the Defense Department is doing a good job putting its financial management on a path to success.

A discussion featuring Lou Crenshaw — retired Navy Vice Admiral and the National Aerospace and Defense practice leader at Grant Thornton


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DOD Comptroller Publishes FIAR Plan Status Report

Financial Improvement and Audit Readiness (FIAR) Plan Status Report

Office of the Under Secretary of Defense (Comptroller) / CFO

Link: http://comptroller.defense.gov/fiar/documents/FIAR_Plan_May_2012.pdf   (30+ MB)

Panetta wants full budget audit by 2014

Defense Secretary Leon Panetta wants the Pentagon to complete a full audit of its budget by 2014, moving the deadline up by three years.


While this puts the pressure on the Pentagon to get its books in order, it is only one of four steps to completing a full financial audit.

Speaking before the House Armed Services Committee on Thursday, Panetta said the accelerated timeline would help Pentagon financial managers identify waste and track spending.

The Pentagon's latest status report on its Financial Improvement and Audit Readiness Plan — the effort to make DoD auditable by 2017 — said the vast majority of the department remains unauditable, although some small agencies are ready, and the Marine Corps by far the smallest and least complex of the military services, is likely to become the first major branch to join them.


-Kate Brannen, FederalTimes.com
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DOD Readies Financial Managers to Meet Goals

WASHINGTON, Oct. 6, 2011 – Recognizing the importance of people in its financial management improvements, the Defense Department is exploring new ways to recruit, retain and train its financial management workforce, a senior defense official told Congress today.


Maintaining a capable financial management workforce is a priority in Pentagon Comptroller Robert F. Hale’s financial management strategy, Sandra A. Gregory told the House Armed Services Committee’s Defense Financial Management and Auditability Reform Panel.

About 60,000 civilian and military financial managers within DOD are key players in efforts to improve financial information, analytics and decision support within the department and to achieve audit readiness, Gregory told the panel.


Among initiatives being advanced is a new DOD financial management certification program. This plan, Gregory explained, will provide “enterprisewide roadmaps on what training is most important at various points throughout federal careers.”


By next summer, DOD officials plan to code financial management positions to three different certification levels, she said. From that point, the department will develop competency assessment tools to assess the current workforce’s proficiency, identify gaps and develop plans to close those gaps.

-Donna Miles, American Forces Press Services
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Better oversight of contracts called key to repairing Pentagon ledgers

Improving oversight and administration of defense contracts is the key to victory in Pentagon financial managers' struggle to meet a 2017 deadline for auditable books, a Defense Department deputy inspector general official said Friday.

"From the contract officer level to the contract officer on the ground, the more improvement in regulation and oversight of contracts, the more we will know about how we are spending the taxpayers' money," Daniel Blair, deputy inspector general for auditing at Defense, told lawmakers.

Members of the House Oversight and Government Reform Subcommittee on Government Organization, Efficiency and Financial Management heard testimony from three financial management specialists discussing the 14-year-plus effort to integrate some 2,200 separate Pentagon business systems -- handling $2 billion to $3 billion in transactions daily -- to achieve auditability and to get Defense accounting systems off the Government Accountability Office's high-risk list.

Defense Secretary Leon Panetta on Thursday reiterated his position that book-keeping problems must be solved quickly.


Of the 14 Defense entities that are required to prepare annual financial statements, only two have achieved an unqualified opinion, said Blair, the two being the Military Retirement Fund and the Army Corps of Engineers Civil Works. In the push to meet the 2017 deadline, which involves standing up new systems that cost $9 billion, some milestones have already begun to slip, he said.

-Charles S. Clark, GovExec.com
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GAO plumps for more DCMO role definition

Financial management improvement at the Defense Department--a long standing goal--requires the involvement of senior Pentagon officials with authority enough to address issues that cut across military services, says the Government Accountability Office in a new report.

The report, dated Jan. 26, says that the department has indeed taken steps to involve the deputy chief management officer and military chief management officers (who are all also service under secretaries) by placing them on the governance board of the Financial Improvement Audit Readiness Directorate. But, the Pentagon has yet to define their specific roles and when they are expected to become involved in problem resolution, the report adds.

The report also suggests that for a goal of Defense Secretary Robert Gates' efficiency drive, namely an initiative to reduce bureaucracy and instill a culture of cost-consciousness and restraint, to become institutionalized over the long term, the DCMO and the DoD CMO (the under secretary) will need specific roles.

-David Perera, FierceGovernmentIT.com
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