Billions Of Dollars And Where Has It Gotten Them?

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By R. Jeffrey Smith
iWatch News | News Report
From The Center for Public Integrity

A costly and lengthy effort by the Pentagon to bring its financial ledgers up to modern standards continues to encounter serious problems, according to a new General Accountability Office report that spotlights shortcomings in accounting software now being tested by the Army and the Air Force.

The software, developed at a pricetag of $2.665 billion since 2003, was meant to streamline archaic, hand-written, ledger accounting practices and enable the services to meet a 2017 legal deadline for producing their first, auditable financial statements. But the GAO, in a report to be released on March 29, cites a series of weaknesses that have produced inaccurate data, “an inability to generate auditable financial reports, and the need for manual workarounds.”

The GAO’s assessment is based on its own research as well as internal Army and Air Force reviews that it said had confirmed problems existed in “data quality, data conversion, system interfaces, and training.” The troubles are evident in trials that so far involve only a fraction of the estimated 529,000 Army and Air Force employees that are slated to use the software while monitoring $471 billion worth of spending or inventory every year.

The aim of upgrading to modern software was partly to save money, since the Pentagon’s legacy accounting systems are  numerous — there are 2,258 of them — and frequently incompatible. By all accounts, so to speak, they cannot produce a clear picture of where and how all that money is being spent.

But the dream of increased efficiencies is looking like, well, a dream, as two-thirds of the Army’s financial data still needs to be entered manually into the software, according to the GAO, and specialists have been forced to cut and paste data into spreadsheets and other software so they can create needed reports.

In the Air Force, where just one-thirtieth of the intended employees are working with the software now, “substantial manual intervention is required on a daily basis” to keep it humming and “required reports were not being produced or were inaccurate or incomplete.” That seems to us like a serious flaw in the accounting world, and indeed the Air Force told the GAO that it is “now engaged in a strategic reassessment” of one of its two main software programs, developed at a cost so far of $876 million.

The Air Force has company in its misery. In October, the Center reported that the Pentagon’s books are in such disarray that getting them ready for an audit in 2017 will cost additional billions of dollars. In December, the Center reported that even after trying for 23 years to meet federal accounting standards, the Navy may not be ready for their own 2017 audit.

The Defense Department’s overall response to the latest GAO blast was essentially: Okay, we’re on this. It said it had actions planned or already under way to fix the problems. But for the most part it set no fixed timetable, prompting the GAO to warn that the problem needs to be given a higher priority.

Reprinted by permission from iWatch News


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