Col. Patrick Burden takes the Army's financial ERP into a new phase

As project manager, Col. Patrick Burden oversees the operations of one of the military’s largest enterprise resource planning (ERP) programs, the General Fund Enterprise Business System. Designed to help the Army track finances, assets and accounting, the $1.8 billion program represents a significant step forward for Defense Department ERPs, particularly as the Pentagon drives toward audit-readiness. 

In a recent interview with Federal Times Senior Writer Amber Corrin, Col. Burden outlined GFEBS’ top goals, its evolution over time and where the program is headed as part of broader DoD financial management reform.

-FederalTimes.com
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Air Force's progress raises DoD's confidence toward audit readiness

Air Force officials say the service is making up the most ground of any of the military services as part of the push to finally get the Defense Department to successfully close its financial books.

But government auditors say this entire Pentagon effort is at risk because of shortcomings in the services' technology systems.

Jamie Morin, the assistant secretary of the Air Force for financial management and comptroller, said he is more optimistic than ever before because the service put money and people behind the problem.

Morin said during a hearing Tuesday before the Senate Homeland Security and Governmental Affairs Committee that there is an increased likelihood that the Air Force will meet the 2017 deadline to have its financial statements fully auditable and the September deadline of being able to assert audit readiness for its schedule of budgetary activity.

This is a major change since last October when Morin told Senate Armed Services Committee members that the Air Force would struggle to meet the 2014 deadline, and 2017 wasn't going to be any easier.

But over the last six months, the Air Force has accomplished specific tasks one- by-one to meet the congressionally mandated deadlines.

Each of the services and DoD on the whole remain at different points in the process to achieve audit readiness. DoD is the only federal department that can't successfully account for its spending to meet third-party auditors requirements. The Marines Corps in fiscal 2012 received an unqualified opinion on its schedule of budgetary activity (SBA) — the first DoD service ever to receive that result.

Robert Hale, the out-going DoD comptroller, said he expects the Marines Corps to earn the same result for 2013.

While each of the services is at different points, the one common major challenge the Army, Navy, Air Force and the Office of the Secretary of Defense all face is updating and integrating their technology software, specifically the enterprise resources planning (ERP) systems, to meet the audit readiness requirements.

Take the Air Force as one example. It's still using a system from 1968.

Morin said the Defense Enterprise Accounting Management System (DEAMS), is under development to replace that 40-year-old system.

He said the service received a positive assessment from the Air Force Operational Test and Evaluation Center on DEAMS as currently deployed at more than six bases.

The Air Force plans to complete DEAMS deployment to all Air Mobility Command in the next couple of weeks and then more bases by Oct. 1. Morin said the Air Force also is on track to complete deployment Air Force-wide before the full financial statement audits begin.

The Army, on the other hand, is in better shape.

Robert Speer, the Army's acting assistant secretary for financial management and comptroller, said the general fund enterprise business system (GFEBs) is used by 53,000 service members and civilians at 200 locations worldwide.

Sen. Tom Coburn (R-Okla.), the ranking member of the committee, said in no uncertain terms if the ERPs don't work, this effort is in real trouble. Coburn has asked both the IG and GAO to continue looking at DoD's ERP efforts.

-Jason Miller, FederalNewsRadio.com
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Senate poised to confirm first DoD IG in nearly two years

The Senate Armed Services Committee took the next step to fill four vacancies in the Defense Department, including one that has been vacant for almost two years.

The department has been without a Senate-confirmed inspector general since December 2011.

President Barack Obama nominated current Federal Deposit Insurance Corporation IG Jon Rymer for the job. Rymer made his case Thursday during his confirmation hearing before the committee. Rymer has been the FDIC IG since 2006. He recently retired from the Army Reserve with more than 30 years of service between his active and reserve duty. He is a graduate of the Army's Inspector General School. His experience in the private sector includes seven years in consulting and interval auditing at a major accounting firm and 15 years as a senior manager in the banking industry.

While very familiar with the Army's prevention programs, Rymer said he believed the role of the IG is to provide oversight for the effectiveness of the programs in place and an analysis of the money spent by each of the services.

-Lauren Larson, FederalNewsRadio.com
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GAO: the Army payroll system is a mess

If you’ve been on Army active duty during the past couple of years, you might want to take another look at your pay stubs. The Government Accountability Office today released a report (GAO-13-28) that detailed major problems with the Army’s $47 billion annual military payroll accounts.

The agency found that the Army “is unable to track and collect data on pay errors for active duty soldiers that occur due to over payments, under payments, data entry errors and fraud,” according to a bipartisan statement issued jointly by Sens. Tom Carper, D-Del., Tom Coburn, R-Okla., Scott Brown, R-Mass., Claire McCaskill, D-Mo., and Reps. Darrell Issa, R-Calif., Edolphus Towns, D-N.Y., and Todd Platts, R-Pa.

GAO found a lot of errors, and said many “went undetected for lengthy periods of time, including some that were not detected for up to 2 years or until the soldier left the Army.”

-Bill McMichael, Delaware Online
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GFEBS completes final Wave for Full Deployment - changes way Army does business

ALEXANDRIA, Va. (Army News Service, July 24, 2012) -- During a time of increased scrutiny of government spending, the General Fund Enterprise Business System (GFEBS) steps forward to transform the way Army manages its finance and real property accounting.


On July 1, GFEBS completed the final Wave for Full Deployment and supporting over 50,000 customers world-wide to facilitate the management of nearly $140 billion in the General Fund, and an additional $80 billion in Overseas Contingency Operations funds.

Previously, the U.S. Army's finances were tracked by multiple systems that were increasingly inefficient, costly and outdated, some more than 30 years old. In an effort to gain visibility over finances and inventories, many Army commands established their own methods and internal systems. These antiquated and fragmented systems impacted military leaders' ability to make informed decisions because there was no clear picture of full resources. This ultimately affected the Soldier.

GFEBS transformed this approach. The GFEBS solution will subsume 107 legacy systems into an enterprise-wide system integrating financial, real property, cost management and performance data. Leaders have visibility through GFEBS to data that has never been available through a single access point, taking into account the true costs of operations, functions, and organizations when making budgeting decisions in support of war fighting capabilities. GFEBS allows leadership to make smarter, faster decisions, ranging from provisioning troops in the midst of battle to budget planning.

GFEBS is the Army's response to the 1990 Chief Financial Officers (CFO) Act, which mandates federal agencies to centralize their finance systems to better account for their spending, and the 1996 Federal Financial Management Improvement Act (FFMIA), requiring federal financial management systems to provide accurate, reliable and timely financial management information to the government's managers.


In the last three years, GFEBS grew from one million transactions and $1.2 billion in obligations in fiscal year 2009 to 20 million transactions and $30.8 billion in obligations in fiscal year 2011. GFEBS currently processes approximately one million transactions a day and $140 billion of the general fund annually.

SESers recognized for leadership, results with Presidential Rank Awards

Teresa Gerton led an effort for the Army that could help the service avoid spending more than $800 million over the next five years.


Deborah Taylor improved the financial operations of the Centers for Medicare and Medicaid Services, which led to the return of $850 million to the Medicare Trust Funds.

And Steve Butler led an effort for the Air Force Material Command to improve how they address high-risk aircraft maintenance that could help the service avoid spending $1 billion.


Gerton, Taylor and Butler were among the 2011 Presidential Distinguished Rank Awardees honored Thursday night at the 27th annual Senior Executives Association Banquet in Washington. See full list of winners here.

-Jason Miller, FederalNewsRadio.com
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Army's payroll problems threaten auditability goals, GAO says

The Government Accountability Office will release a report this morning detailing problems with the Army's payroll system — challenges that threaten the Defense Department's ability to be audit-ready.


GAO found the Army could not identify a "complete population of Army payroll accounts" for fiscal 2010, said Asif Khan, director of financial management and assurance at GAO, in his written testimony,

It took the Army three months to provide a list of servicemembers who receive active-duty Army military pay, Khan said.

DoD also could not locate supporting documentation for some of its pay accounts, according to the GAO testimony.

Active Army military payroll was $46.1 billion for fiscal 2010 and therefore "significant to DoD's audit readiness goals," Khan said.

Congress has told the Pentagon it must reach full auditability of its consolidated financial statements by the end of 2017. Last fall, Defense Secretary Leon Panetta ordered the department to have its budgetary resources, one part of the overall audit, ready by 2014.

-Jolie Lee, FederalNewsRadio.com
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GFEBS financial management system worldwide

Washington, D.C. — The most advanced financial management system in Army history, the General Fund Enterprise Business System, or GFEBS, is now operational worldwide.


The GFEBS now has nearly 40,000 users across all service components, and is the most widely implemented of the Army’s Enterprise Resource Planning systems. It’s expected when fully deployed, sometime in Fiscal Year 2012, GFEBS will engage close to 60,000 users at some 200 locations worldwide and will affect almost every Army organization and function.

The GFEBS records financial transactions with supporting documentation, tracks transactions to the detailed level, and will produce an auditable trial balance. The Army Audit Agency’s most recent evaluation found that GFEBS complies with 1,054 of 1,113 requirements from the Federal Financial Management Improvement Act. On-going development of GFEBS will complete the remaining 5 percent for full compliance in FY 2012.

GFEBS received a full deployment decision June 24 from Department of Defense Deputy Chief Management Officer Elizabeth McGrath, the program’s milestone decision authority. The decision affirmed the deployment readiness of the GFEBS solution and authorized Armywide system implementation.


The GFEBS deployment is scheduled to conclude in 2012, providing a core system for managing a significant portion of the Army’s general fund and ushering in a new era in Army financial management.

-Frank Distasio, Army News Service
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Air Force at risk of missing financial audit deadline

The Air Force may not meet the 2017 deadline to have a clean financial audit.


Air Force comptroller Jamie Morin told House lawmakers Thursday the state of information technologies plays into service readiness.

Morin said the Air Force has made "real progress," but "the 2017 deadline will be challenging for the Air Force. We do see moderate risk but with a high level of leadership commitment we feel we are on track to make the deadline. IT systems modernization is an inescapable part of the Air Force effort."


Congress put the Defense Department on notice in the National Defense Authorization Act for fiscal year 2010 when it required the Pentagon to validate its financial statements as ready for audit not later than Sept. 30, 2017.

Other Defense services told the House Armed Services Committee's Panel on Defense Financial Management and Auditability Reform they are on track to meet the deadline, or already have a clean audit opinion.


The Army Corps of Engineers, for instance, already has earned clean audit opinion by independent examiners. The Marine Corps is currently undergoing an audit of its statement of budgetary resources.

Offices from the departments of the Army and Navy expressed confidence that they will meet the 2017 deadline.


-Peter Buxbaum, FederalNewsRadio.com
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Pentagon puts 'faith' in achieving clean audit by 2017

It's the law: The Defense Department must know how it spends every cent of its budget by 2017. But the agency said only 14 percent of its budget is now auditable.


Deputy chief financial officer Mark Easton jokingly said he's overseeing a "faith-based initiative."

But with budget cuts on one hand and the continuing costs of war on the other, Easton said he has a lot of faith in preparing the nation's biggest employer for a complete financial audit by 2017.

The Pentagon has been trying to prepare its books for a complete financial audit for more than 20 years. A few departments, including the Army Corps of Engineers, are on track.


"But the picture is different when we look at the Army, the Navy, the Marine Corps and the Air Force," said Asif Khan, the Government Accountability Office's director of financial management and assurance, who joined Easton on the panel.


Khan said one of the biggest problems is DoD hasn't been able to operate what he calls the "building blocks of sound financial management" — the technology known as enterprise resource planning systems (ERPs) that would help them collect, analyze and prepare data.

-Emily Kopp, FederalNewsRadio.com
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DoD ERP implementation woes include feeder systems

Worries about the Defense Department's implementation of enterprise resource planning systems increasingly encompasses data quality from feeder systems.
The Army has hired an independent auditor to examine its financial management ERP, the General Fund Enterprise Business System, for whether "we are using it in a way to include the feeder systems that's auditable," said Robert Hale, the DoD comptroller, during a July 27 Senate hearing.

Hale said plans exist to do a similar check with the Navy "in the context of a major defense acquisition program" and later with the Air Force ERP, the Defense Enterprise Accounting and Management System.

Jamie Morin, the Air Force comptroller, told the committee that DEAMS detects bad data from feeder systems more readily than legacy systems. DEAMS "told us thousands of transactions were not meeting standards, which instantly brought the level of management attention to fix the problem," he said.

Meanwhile, when parts deemed worth saving from the to-be-shuttered Business Transformation Agency are moved into the office of the Defense Department deputy chief management officer, the modernized financial system the BTA has been using will go on hiatus for a while, DCMO Elizabeth McGrath said.

The financial system, the Defense Agencies Initiative, would be an anomaly among secretary of defense offices were the DCMO to start utilizing it immediately, McGrath said before the subcommittee.

But the plan is not to shutter DAI, McGrath said. "We're moving to DAI. We're not doing it today, because I'm a component of the overall OSD budget," she added.

-David Perera, FierceGovernmentIT.com
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Auditors say Army financial ERP program at high risk

An Army enterprise resource planning system--which, if fully implemented, would be one of the world's largest public sector ERPs--is at high risk of running even more over schedule and budget and resulting in a system that falls short of objectives, says the Defense Department inspector general.

In a report dated June 15, the DoD OIG finds that the financial management system known as the General Fund Enterprise Business System continues to lack a detailed data conversion plan and supported cost estimates.

DoD auditors first publically noted both problems in 2008, but the Army and Defense Department have not implemented seven of the 16 recommendations they made at the time, the report says.

-David Perera, FierceGovernmentIT.com
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Sen. Tom Coburn presses Pentagon leaders to improve financial management

Republican says he’ll push for budget freeze on some accounts until books can be audited

WASHINGTON — Sen. Tom Coburn on Tuesday asked the nation’s top military leaders to get the Pentagon’s financial books in order, saying he would press for a budget freeze on some accounts until they can be audited.

Coburn, R-Muskogee, sent a letter to the chiefs of staff of the U.S. Army, Air Force, Navy and Marine Corps asking them “to aggressively pursue financial improvement and audit readiness in order to preserve the military’s ability to take care of our troops today and to invest in the needed modernization of our weapon systems for the future.”

Coburn wrote that better financial management could save money and prevent cuts, but that strong leadership was needed to overcome “institutional resistance” to changes at the Pentagon.

The senator said the Pentagon could not produce financial statements that could be audited and that managers couldn’t make important financial decisions without accurate data.

The Government Accountability Office, the auditing arm of Congress, has repeatedly placed some of the Pentagon’s business operations in its “high-risk” category “because of their vulnerability to waste, fraud, abuse and mismanagement.”

In a report last week, the GAO said the Pentagon has made some progress toward reforming its business practices, including naming a chief management officer and a deputy chief management officer.

-Chris Casteel, NewsOK.com
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DoD IG blasts Army LMP

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
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- download the report, D-2011-015 (.pdf)

Recent GAO Publications

The Government Accountability Office (GAO) recently released the following publications:

"Key Challenges Facing Government Managers," by Gene L. Dodaro, acting comptroller general, before the Interagency Resources Management Conference, in Cambridge, Maryland.
GAO-09-609CG, April 21, 2009
http://www.gao.gov/cghome/d09609cg.pdf

"The Recovery Act and TARP: GAO's Oversight Role," by Gene L. Dodaro, acting comptroller general, before the National State Auditors Association annual conference, in Savannah, Georgia.
GAO-09-846CG, June 17, 2009
http://www.gao.gov/cghome/d09846cg.pdf

Military Pay: The Defense Finance and Accounting Service--Indianapolis Could Improve Control Activities over Its Processing of Active Duty Army Military Personnel Federal Payroll Taxes.
GAO-09-557R, June 18.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-557R

Troubled Asset Relief Program: June 2009 Status of Efforts to Address Transparency and Accountability Issues.
GAO-09-658, June 17.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-658
Highlights - http://www.gao.gov/highlights/d09658high.pdf

Troubled Asset Relief Program: Capital Purchase Program Transactions for October 28, 2008, through May 29, 2009, and Information on Financial Agency Agreements, Contracts, Blanket Purchase Agreements, and Interagency Agreements Awarded as of June 1, 2009 (an e-supplement to GAO-09-658).
GAO-09-707SP, June 17
http://www.gao.gov/cgi-bin/getrpt?GAO-09-707SP

American Battle Monuments Commission: Management Action Needed to Improve Internal Control Procedures.
GAO-09-714R, June 17.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-714R


CBP Could Improve Its Estimation of Funding Needed for New Border Patrol Agents.
GAO-09-542R, June 15.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-542R

Public Housing: HUD's Oversight of Housing Agencies Should Focus More on Inappropriate Use of Program Funds.
GAO-09-33, June 11.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-33
Highlights - http://www.gao.gov/highlights/d0933high.pdf

Army Working Capital Fund: Actions Needed to Improve Budgeting for Carryover at Army Ordnance Activities.
GAO-09-415, June 10.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-415
Highlights - http://www.gao.gov/highlights/d09415high.pdf

VA Real Property: VA Emphasizes Enhanced-Use Leases to Manage Its Real Property Portfolio, by David Wise, director, physical infrastructure issues, before the Senate Committee on Veterans' Affairs.
GAO-09-776T, June 10.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-776T
Highlights - http://www.gao.gov/highlights/d09776thigh.pdf

Appropriations Decisions:

B-317139, Financial Crimes Enforcement Network--Obligations under a
Cost-Reimbursement, Nonseverable Services Contract, June 1, 2009
http://www.gao.gov/decisions/appro/317139.htm

Army rolls forward with Web financial system

GFEBS set for wide deployment in 2009

The U.S. Army’s five-year-long effort to transition its financial management to an enterprise resource planning (ERP) configuration moved forward in late 2008 when the first fielded solution, known as Release 1.2, was rolled out to Fort Jackson, S.C., the Army’s primary center for basic combat training.

The General Fund Enterprise Business System (GFEBS) is a Web-enabled ERP system from SAP that will allow the Army to share financial, asset and accounting data across the service. The GFEBS implementation involves standardizing financial management and accounting functions such as reimbursables between commands, and real property inventory and management across the Army. It will ultimately serve 79,000 users at about 200 installations around the world, and will manage about $200 billion in spending by the active Army, the Army National Guard and the Army Reserves.

The Fort Jackson deployment went out to about 250 users. Release 1.2 will begin the process of subsuming the Army’s Standard Financial System (STANFINS) and Standard Operation and Maintenance Army Research & Development System (SOMARDS), as well as the majority of their feeder systems, and over time will create a single access point for all Army financial, asset management and real property information.

Eventually, 84 systems will subsume all or part of their functionality to GFEBS, according to Jones. Not every Army financial system will fall under the GFEBS umbrella, at least not right away.

For 2009, the plan is to introduce GFEBS Release 1.3 in April to the rest of Fort Jackson, and also to Fort Benning, Ga., and Fort Stewart, Ga. Release 1.3 is aimed mainly at replacing STANFINS, with new functionality that automates processes and interfaces with the funds control module to bring in supply data.

October 2009 will see the rollout of Release 1.4 to nine major installations in the Southeast U.S. It is at that point that GFEBS will take over more of the SOMARDS function.

- Barry Rosenburg, DefenseSystems.com

Accenture Helps U.S. Army Go Live with New Financial System

New system integrates financial management capabilities and prepares Army for department-wide deployment

WASHINGTON--(BUSINESS WIRE)--The U.S. Army has deployed release 1.2 of its financial system at Fort Jackson, S.C., with the help of Accenture (NYSE: ACN). The new financial system, known as the General Fund Enterprise Business System (GFEBS), integrates all related components and supports financial management and real property functions. The successful implementation of release 1.2 sets the stage for Army-wide deployment of the system by 2012.
Release 1.2 of GFEBS serves as the global design for all of the Army to provide organizations with new business processes in seven areas, including financial management, real property and cost management.

As the prime system integrator for the program, Accenture has worked with the Army’s Program Executive Office, Enterprise Information Systems, on GFEBS since July 2005, when it was awarded the contract to design, build, deploy and maintain the system, which eventually will consolidate and subsume approximately 84 existing information systems.

GFEBS is a Web-enabled solution based on commercial-off-the-shelf software from SAP that will integrate seamlessly into the Army’s information technology environment. The new financial system is designed to manage annual general fund appropriated expenditures across the Army, National Guard and Army Reserves. Serving more than 79,000 end-users at nearly 200 Army financial centers worldwide, GFEBS will become one of the world's largest SAP implementations, enabling management of a budget that exceeds $140 billion.

Accenture and the Army have been working on GFEBS Release 1.2 since September 2006, following a technology demonstration that proved the ability of GFEBS to meet the information requirements needed to operate and support the management of real property inventory, part of the Army’s general fund.

GFEBS Release 1.2 affects 221 users from eight deployment sites across several states and the Pentagon.

Accenture is working concurrently on Release 1.3, which will include additional functionality for GFEBS to provide general fund financial management, asset management and real property capabilities at all garrisons and tenant organizations Army-wide.

Today's GAO Publication

The Government Accountability Office (GAO) today released the following report:

Federal Real Property: Corps of Engineers Needs to Improve the Reliability of Its Real Property Disposal Data.
GAO-08-349, May 9
http://www.gao.gov/cgi-bin/getrpt?GAO-08-349
Highlights - http://www.gao.gov/highlights/d08349high.pdf

The Pentagon's $1 Trillion Problem

The defense department has spent billions to fix its antiquated financial systems. So why does the Pentagon still have no idea where its money goes?

Since 2004, the Pentagon has spent roughly $16 billion annually to maintain and modernize the military's business systems, but most are as unreliable as ever—even as the surge in defense spending is creating more room for error. The basic defense budget for 2007 was $439.3 billion, up 48 percent from 2001, excluding the vast additional sums appropriated for the wars in Iraq and Afghanistan. According to federal regulators and current and former Pentagon officials, the accounting process is so obsolete and error prone that it's virtually impossible to tell where much of this money ends up. While the department's brass has made a few patchwork improvements, billions are still unaccounted for. The problem is so deeply rooted that, 18 years after Congress required major federal agencies to be audited, the Pentagon still can't be. (Read a chronology of efforts to modernize the military's financial systems.)

"In the Defense Department, what you have now are material weaknesses that are in every single area, in every part of the department, so deep and so wide you do not really have any way of figuring out where money is being spent," says Linda Bilmes, a federal budget expert at Harvard's Kennedy School of Government.

According to David Walker, who recently left his post as head of the Government Accountability Office, the failure of the Pentagon's outdated and incompatible systems to keep tabs on expenditures—even as the wars in Iraq and Afghanistan eat up an ever-bigger chunk of the federal budget—puts several Defense Department agencies high on the G.A.O.'s list of federal programs that are mismanaged and prone to fraud, waste, and abuse.

Since the scandal in 1985, which revealed that the Navy paid Lockheed $640 each for airplane toilet seats, Congress, military leaders, and regulators have agreed that the Defense Department's internal accounting system is in shambles. What's startling is the scope of the problem and the government's seeming inability to fix it. Over the past two decades, the Pentagon has repeatedly tried to design new computer systems to replace the antiquated ones. Even today, new incompatible financial systems continue to proliferate within the services, contrary to directives from the secretary of Defense's office.

The dysfunction stems in part from the traditional independence of the military branches. Over several decades, they have cobbled together separate processes for identical functions, resulting in the uncontrolled growth of more than 4,000 accounting, financial, and inventory systems. Their names form an acronym soup: CAPS, Stanfins, IAPS, Somards, Samms, Mocas, HQARS, Stars. The department's primary system for handling weapons contracts and payments dates from 1958; a costly attempt to replace it was abandoned in 2002 as a failure. The Army's notoriously inaccurate main accounting system was created in 1966.

Since 2005, the Pentagon has been carrying out what it says is the most comprehensive reform ever. Undersecretary of Defense Tina Jonas, who is now the comptroller and chief financial officer, is heading up an elaborate effort—once again—to develop compatible systems to share information seamlessly. A 2007 department report foresees the Pentagon becoming "as nimble, adaptive, flexible, and accountable as any organization in the world."

Overburdened by wars in Iraq and Afghanistan, the individual services remain reluctant to commit staff members and money to Jonas' financial-reform effort.

Jonas says that her approach is working and that eight small Pentagon branches, like the Army Corps of Engineers, have now passed audits. "I think we're making good progress," she says.

Nevertheless, the four military services still can't be audited, and Jonas declines to predict when the entire Defense Department will finally pass an audit. "We don't know what we don't know," she says.

-Scot Paltrow, CondeNast Portfolio
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Army tries to restore GFEBS funding

To help it move forward with its program to bring sound financial management and accountability through its General Fund Enterprise Business System, Army officials must ask Congress for permission to replace funding cut from the program’s fiscal 2007 budget.

GFEBS is the Army’s initiative to consolidate and reform its financial management systems through an integrated architecture using modified SAP software. The Army is looking to replace 87 financial systems with GFEBS, bringing long-awaited efficiency and integration. About 79,000 Army employees and contractors will use the new system to manage the Army’s annual budget of $110 billion.

But Congress cut the GFEBS budget by $115.7 million, leaving only $21 million in funding for fiscal 2007. The Army has asked congressional committee staff members for permission to restore some of the lost funding by using money from other areas of the budget. The Army wants to increase funding for research, development, testing and evaluation by $56.3 million through a reprogramming action, said Cherie Smith, GFEBS project director.

This is a crucial year for GFEBS. It plans to distribute Release 1.2, which involves deploying the system to the Department of the Army Headquarters, the Defense Finance and Accounting Service and the Army Installation Management Command. Release 1.1 was limited to a testing center at Fort Jackson, S.C.

The Army will be able to achieve the elusive clean audit when GFEBS is fully deployed, officials said. But that won’t be possible until the end of the system’s deployment, scheduled for late 2010.

“This is our opportunity to take a large number of legacy financial systems…and bring them together into a single, integrated financial system,” said Nelson Ford, assistant secretary of the Army for financial management and comptroller, at the opening of GFEBS’ new facility in Alexandria, Va.

GFEBS is the core piece of the Single Army Financial Enterprise. The Army is also working with the Business Transformation Agency to ensure GFEBS is designed to comply with DOD’s Business Enterprise Architecture.

President Bush's fiscal 2008 budget, released Feb. 5, seeks $53.6 million for GFEBS.


-Josh Rogin, FCW.com

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