DOD FINANCIAL 

MANAGEMENT

Challenges in Attaining 

Audit Readiness and 

Improving Business 

Processes and Systems 

Statement of Asif A. Khan, Director 

Financial Management and Assurance

Testimony 

Before the Subcommittee on Readiness 

and Management Support, Committee on 

Armed Services, U.S. Senate

For Release on Delivery 

Expected at 2:30 p.m. EDT

Wednesday, April 18, 2012

GAO-12-642T

United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-12-642T, a testimony 

before the Subcommittee on Readiness and 

Management Support, Committee on Armed 

Services, U.S. Senate 

April 18, 2012 

DOD FINANCIAL MANAGEMENT

Challenges in Attaining Audit Readiness and 

Improving Business Processes and Systems

Why GAO Did This Study

Over the years, the Department of 

Defense (DOD) has initiated several

efforts intended to improve its financial 

management operations and ultimately 

achieve an unqualified (clean) opinion 

on its financial statements. These 

efforts have fallen short of sustained 

improvement in financial management 

and financial statement auditability.

In this statement, GAO provides its 

assessment of DOD’s progress toward: 

(1) producing an auditable Statement 

of Budgetary Resources (SBR) by 

fiscal year 2014 and a complete set of 

auditable financial statements by fiscal 

year 2017, including the development 

of interim milestones for both 

aforementioned audit readiness goals; 

(2) acquiring and implementing new 

enterprise resource programs and 

other critical financial management 

systems; (3) reengineering business 

processes and instituting needed 

controls; and (4) implementing a 

comprehensive business enterprise 

architecture and transition plan, and 

improved investment control 

processes. 

This statement is primarily based on 

GAO’s prior work related to the 

department’s efforts to achieve audit 

readiness, implement modern business 

systems, and reengineer its business 

processes. GAO also obtained and 

compared key milestones in a 

February 2012 DOD briefing on its 

updated plans to accelerate achieving

SBR auditability with the May 2011 

Financial Improvement and Audit 

Readiness plan but did not 

independently verify the updated 

information in the February 2012 

briefing.

What GAO Found

GAO’s recent work highlights the types of challenges facing the Department of 

Defense (DOD) as it strives to attain audit readiness and reengineer its business 

processes and systems. The urgency in addressing these challenges has been 

increased by the goals of an auditable DOD Statement of Budgetary Resources

(SBR) by the end of fiscal year 2014 and a complete set of auditable financial 

statements by the end of fiscal year 2017. For example, GAO’s 2011 reporting

highlights difficulties the DOD components experienced in attempting to achieve an 

auditable SBR. These include: 

• the Navy’s and the Air Force’s premature assertions of audit readiness and 

missed interim milestones; 

• the Army’s inability to locate and provide supporting documentation for its 

military pay; 

• the Navy’s and Marine Corps’ inability to reconcile their Fund Balance with 

Treasury (FBWT) accounts; and

• the Marine Corps’ inability to receive an opinion on both its fiscal years 2010 

and 2011 SBRs because it could not provide supporting documentation in a 

timely manner, and support for transactions was missing or incomplete. 

In a February 2012 briefing on its updated plans, DOD accelerated milestones for its 

components —in some cases, significantly—to accomplish the 2014 SBR goal. For 

example, the Air Force had planned to validate its audit readiness for many SBRrelated items in fiscal year 2016; however, the department’s February 2012 

accelerated plans show that most of the Air Force’s SBR line items will be audit-ready 

in fiscal years 2013 or 2014. Also, in its February 2012 update DOD shows that 7 of 

24 material general fund Defense Agencies and Other Defense Organizations have 

either already had SBR audits or are ready to have their SBRs audited, which 

represent important positive steps. 

DOD has stated it considers the successful implementation of its enterprise resource 

planning (ERP) systems critical to transforming its business operations, addressing 

long-standing weaknesses, and ensuring the department meets its mandated 

September 30, 2017 auditability goals. However, in 2011, GAO reported that

independent assessments of two of these systems—the Army’s and Air Force’s new 

general ledger systems—identified operational problems, gaps in capabilities that 

required manual workarounds, and training that was not focused on system 

operation. Moreover, users of these systems had difficulties using these systems to 

perform daily operations. GAO also reported in 2011 on numerous weaknesses in 

DOD’s enterprise architecture and business processes that affect DOD’s auditability. 

For example, while DOD continued to update its corporate enterprise architecture, it 

had not yet augmented its corporate architecture with complete, coherent subsidiary 

architectures for DOD components such as the military departments. Also, while 

DOD and the military departments largely followed DOD’s Business Process 

Reengineering Guidance to assess business system investments, they had not yet 

performed the key step of validating assessment results. GAO has made prior 

recommendations to address these issues. DOD has generally agreed with these 

recommendations and is taking corrective actions in response. GAO has work 

underway to evaluate DOD’s continuing efforts in these areas. View GAO-12-642T. For more information, 

contact Asif A. Khan at (202) 512-9869 or 

khana@gao.gov. 
 

Page 1 GAO-12-642T 

Chairman McCaskill, Ranking Member Ayotte, Members of the 

Subcommittee:

It is a pleasure to be here today to discuss the status of the Department 

of Defense’s (DOD) efforts to improve its financial management and 

related business operations and to achieve audit readiness. DOD has 

been required to prepare departmentwide financial statements and have 

them audited since 1997, but through 2011, has not been able to meet 

this requirement.1 On October 13, 2011, the Secretary of Defense 

directed the department to achieve audit readiness for the Statement of 

Budgetary Resources (SBR) for General Fund2 activities by the end of 

fiscal year 20143 as an interim milestone toward meeting the mandate in 

the National Defense Authorization Act (NDAA) for Fiscal Year 2010 to 

achieve full audit readiness for DOD’s complete set of financial 

statements by the end of 2017.4

Today, I will discuss DOD’s progress toward: (1) achieving the goals of an 

auditable SBR by fiscal year 2014 and a complete set of auditable 

financial statements by fiscal year 2017, including the development of 

interim milestones for both audit readiness goals, (2) acquiring and 

implementing new enterprise resource programs and other critical 

financial management systems, (3) reengineering business processes 

and instituting needed controls, and (4) implementing a comprehensive 

Given the federal government’s fiscal 

challenges, it is more important than ever that the Congress, the 

administration, and federal managers have reliable, useful, and timely 

financial and performance information, particularly for the government’s 

largest department.

 

1

The Chief Financial Officers Act of 1990, Pub. L. No. 101-576, title III, § 303, 104 Stat. 

2838, 2849 (Nov. 15, 1990), initially required annual audited financial statements of 

certain DOD components and activities, but the Government Management Reform Act of 

1994, Pub. L. No. 103-356, § 405, 108 Stat. 3410, 3415 (Oct. 13, 1994), expanded the 

annual requirement to departmentwide financial statements beginning with fiscal year 

1996, which at the time had to be prepared no later than March 1, 1997. See 31 U.S.C. § 

3515. 

2

An agency’s general fund accounts are those accounts in the U.S. Treasury holding all 

federal money not allocated by law to any other fund account. GAO, High-Risk Series: An 

Update, GAO-11-278 (Washington, D.C.: Feb 16, 2011). 

3

DOD, Secretary of Defense Memorandum, “Improving Financial Information and 

Achieving Audit Readiness,” October 13, 2011. 

4

Pub. L. No. 111-84, § 1003(a), (b), 123 Stat. 2190, 2439-40 (Oct. 28, 2009).

 
 

Page 2 GAO-12-642T 

business enterprise architecture and transition plan, and improved 

investment control processes. My statement today is primarily based on 

our prior work related to the department’s efforts to achieve audit 

readiness, implement modernized business systems and a business 

enterprise architecture, and reengineer its business processes. In 

addition, we are providing information on DOD’s updated plans for 

achieving auditability presented at a February 2012 briefing. Specifically, 

we are presenting a comparison of key milestones in the February 2012 

DOD briefing5 that outlined its plans to accelerate the timeframe to 

achieve SBR auditability with DOD’s May 2011 Financial Improvement 

and Audit Readiness (FIAR) plan. We also conducted interviews with 

DOD officials about the February 2012 briefing. We did not independently 

verify information contained in the February 2012 briefing with DOD or 

any of its components or agencies. Our work on which this testimony is 

based was conducted in accordance with generally accepted government 

auditing standards. Those standards require that we plan and perform the 

audit to obtain sufficient, appropriate evidence to provide a reasonable 

basis for our findings and conclusions based on our audit objectives. We 

believe the evidence obtained provides a reasonable basis for our 

findings and conclusions based on our audit objectives. Additional 

information on our scope and methodology is available in previously 

issued products.

According to the fiscal year 2013 President’s Budget, DOD accounts for 

about 57 percent of the discretionary federal budget authority. 

(See figure 1.)

 

5

Office of the Secretary of Defense (Comptroller), Accelerated Financial Improvement and 

Audit Readiness (FIAR) Plan, presented to the staff of the House Committee on Oversight 

and Government Reform, February 14, 2012. 

Background
 

Page 3 GAO-12-642T 

Figure 1: Comparison of DOD’s Fiscal Year Budget Authority with That of Other 

Federal Agencies

For fiscal year 2011, of the 24 agencies covered by the Chief Financial 

Officers Act of 1990 (CFO Act), DOD was the only agency to receive a 

disclaimer of opinion on all of its financial statements.6

• the department’s fiscal year 2011 financial statements would not 

substantially conform to generally accepted accounting principles;

The DOD 

Inspector General (IG) reported that

• DOD’s financial management and feeder systems were unable to 

adequately support material amounts on the financial statements; and

• long-standing material internal control weaknesses identified in prior 

audits continued to exist, including material weaknesses in areas such 

as financial management systems, Fund Balance with Treasury, 

Accounts Receivable, and General Property, Plant, and Equipment.

In 2005, the DOD Comptroller first prepared the Financial Improvement 

and Audit Readiness (FIAR) Plan for improving the department’s 

 

6

In a disclaimer of opinion, the auditor does not express an opinion on the financial 

statements. A disclaimer of opinion is appropriate when the audit scope is not sufficient to 

enable the auditor to express an opinion, or when there are material uncertainties 

involving a scope limitation—a situation where the auditor is unable to obtain sufficient 

appropriate audit evidence.
 

Page 4 GAO-12-642T 

business processes. The FIAR Plan is DOD’s strategic plan and 

management tool for guiding, monitoring, and reporting on the 

department’s financial management improvement efforts. As such, the 

plan communicates progress in addressing the department’s financial 

management weaknesses and achieving financial statement auditability. 

In accordance with the NDAA for Fiscal Year 2010, DOD provides reports 

to relevant congressional committees on the status of DOD’s 

implementation of the FIAR Plan twice a year—no later than May 15 and 

November 15.7

The NDAA for Fiscal Year 2010 also mandated that the FIAR Plan 

include the specific actions to be taken to correct the financial 

management deficiencies that impair the department’s ability to prepare 

timely, reliable, and complete financial management information.8 In May 

2010, the DOD Comptroller issued the FIAR Guidance to implement the 

FIAR Plan. The FIAR Guidance provides a standardized methodology for 

DOD components to follow for achieving financial management 

improvements and auditability. The FIAR Guidance requires DOD 

components to identify and prioritize their business processes into 

assessable units,9 and then prepare a Financial Improvement Plan (FIP) 

for each assessable unit in accordance with the FIAR Guidance. Many of 

the procedures required by the FIAR Guidance are consistent with 

selected procedures for conducting a financial audit, such as testing 

internal controls and information system controls. In September 2010, we 

reported that the department needed to focus on implementing its FIAR 

Plan and that the key to successful implementation would be the efforts of 

the DOD military components and the quality of their individual FIPs.10

A FIP serves as a framework of steps and documentation requirements 

for both planning and implementing the FIAR Guidance. For example, 

civilian and military pay are two assessable units for which DOD 

 

7

Pub. L. No.111-84, §1003(b). 

8

Pub. L. No.111-84, §1003(a)(2).

9

An assessable unit can be any part of the financial statements, such as a line item or a 

class of assets (e.g., civilian pay or military equipment), a class of transactions, or it can 

be a process or a system that helps produce the financial statements. 

10GAO, Department of Defense: Financial Management Improvement and Audit 

Readiness Efforts Continue to Evolve, GAO-10-1059T (Washington, D.C.: Sept. 29, 

2010). 
 

Page 5 GAO-12-642T 

components, such as the Army, Navy, and Air Force, are expected to 

develop and implement FIPs in accordance with the FIAR Guidance. The 

steps required for these plans include assessing processes, controls, and 

systems; identifying and correcting weaknesses; assessing, validating, 

and sustaining corrective actions; and ultimately achieving audit 

readiness. After a component’s management determines that an 

assessable unit is ready for audit, both the DOD Comptroller and the 

DOD Inspector General (IG) review the related FIP documentation to 

determine if they agree with management’s conclusion of audit readiness.

DOD intends to progress toward achieving financial statement auditability 

by executing the FIAR Guidance methodology for groups of assessable 

units across four waves. Under the FIAR Plan, successful execution of 

the FIAR Guidance methodology for groups of assessable units across 

these waves is intended to result in the audit readiness of various 

components’ financial statements through fiscal year 2017. The first two 

waves of the FIAR Plan focus on achieving the DOD Comptroller’s interim 

budgetary priorities, which DOD believes should lead to an auditable 

SBR. The third wave focuses on accountability for DOD’s mission-critical 

assets, and the fourth wave focuses on the remaining assessable units 

constituting DOD’s complete set of financial statements.

As mentioned earlier, the Secretary of Defense directed the department 

to achieve audit readiness for the SBR for General Fund activities by the 

end of fiscal year 2014. The NDAA for Fiscal Year 2012 reinforced this 

directive by requiring that the next FIAR Plan Status Report—to be issued 

in May 2012—include a plan, with interim objectives and milestones for 

each military department and the defense agencies, to support the goal of 

SBR audit readiness by 2014.11

The SBR is the only financial statement predominantly derived from an 

entity’s budgetary accounts in accordance with budgetary accounting 

rules, which are incorporated into generally accepted accounting 

principles (GAAP) for the federal government. The SBR is designed to 

The NDAA for Fiscal Year 2012 also 

requires the plan to include process and control improvements and 

business systems modernization efforts necessary for the department to 

consistently prepare timely, reliable, and complete financial management 

information.

 

11Pub. L. No. 112-81, §1003, 125 Stat. 1298, 1555 (Dec. 31, 2011).
 

Page 6 GAO-12-642T 

provide information on authorized budgeted spending authority reported 

in the Budget of the United States Government (President’s Budget), 

including budgetary resources, availability of budgetary resources, and 

how obligated resources have been used.

In November 1990, DOD created the Defense Finance and Accounting 

Service (DFAS) as its accounting agency to consolidate, standardize, and 

integrate finance and accounting requirements, functions, procedures, 

operations, and systems.12

To support its operations, DOD performs an assortment of interrelated 

and interdependent business functions, such as logistics, procurement, 

health care, and financial management. As we have previously reported, 

the DOD systems environment that supports these business functions 

has been overly complex, decentralized, and error prone, characterized 

by (1) little standardization across the department, (2) multiple systems 

performing the same tasks and storing the same data, and (3) the need 

for data to be entered manually into multiple systems. For fiscal year 

2012, the department requested about $17.3 billion to operate, maintain, 

and modernize its business systems. DOD has reported that it relies on 

2,258 business systems, including 335 financial management systems, 

709 human resource management systems, 645 logistics systems, 243 

real property and installation systems, and 281 weapon acquisition 

management systems.

The military services continue to perform 

certain finance and accounting activities at each military installation. 

These activities vary by military service depending on what the services 

retained and the number of personnel they transferred to DFAS. As 

DOD’s accounting agency, DFAS is critical to DOD auditability as it 

records transactions in the accounting records, prepares thousands of 

reports used by managers throughout DOD and by the Congress, and 

prepares DOD-wide and service-specific financial statements. The 

military services play a vital role in that they authorize most of DOD’s 

expenditures and are the source of most of the financial information that 

DFAS uses to make payroll and contractor payments. The military 

services also have responsibility for most of DOD’s assets and the related 

information needed by DFAS to prepare annual financial statements 

required under the CFO Act.

 

12DOD Directive 5118.5, "Defense Finance and Accounting Service" (Nov. 26, 1990). 

Overview of DOD’s 

Accounting and Business 

Operations
 

Page 7 GAO-12-642T 

For decades, DOD has been challenged in modernizing its timeworn 

business systems. Since 1995, GAO has designated DOD’s business 

systems modernization program as high risk. In June 2011, we reported 

that the modernization program had spent hundreds of millions of dollars 

on an enterprise architecture and investment management structures that 

had limited value.13 As our research on public and private sector 

organizations has shown, two essential ingredients to a successful 

systems modernization program are an effective institutional approach to 

managing information technology (IT) investments and a well defined 

enterprise architecture.14

Section 1072 of the NDAA for Fiscal Year 2010 requires that programs 

submitted for approval under DOD’s business system investment 

approach be assessed to determine whether or not appropriate business 

process reengineering efforts have been undertaken. The act further 

states that these efforts should ensure that the business process to be 

supported by the defense business system modernization will be as 

streamlined and efficient as practicable and the need to tailor commercial 

off-the-shelf systems to meet unique requirements or incorporate unique 

interfaces has been eliminated or reduced to the maximum extent 

practicable.

For its business systems modernization, DOD is 

developing and using a federated business enterprise architecture, which 

is a coherent family of parent and subsidiary architectures, to help 

modernize its nonintegrated and duplicative business operations and the 

systems that support them.

15

GAO’s recent work highlights the types of challenges facing DOD as it 

strives to attain audit readiness and reengineer its business processes 

and systems. DOD leadership has committed DOD to the goal of 

auditable financial statements and has developed FIAR Guidance to 

provide specific instructions for DOD components to follow for achieving 

auditability incrementally. The department and its components also 

established interim milestones for achieving audit readiness for various 

 

13GAO, Department of Defense: Further Actions Needed to Institutionalize Key Business 

System Modernization Management Controls, GAO-11-684 (Washington, D.C.: June 29,

2011). 

14GAO-11-684. 

15Pub. L. No.111-84, § 1072 (amending 10 U.S.C. §2222).

Importance of Business 

Enterprise Architecture 

and Reengineering 

Business Processes

Challenges in 

Achieving Audit 

Readiness
 

Page 8 GAO-12-642T 

parts (or assessable units) of the financial statements. These efforts are 

an important step forward. The urgency in addressing these challenges 

has been increased by the recent efforts to accelerate audit readiness 

time frames, in particular attaining audit readiness for the department’s 

SBR by fiscal year 2014. Our September 2011 report highlights the types 

of challenges DOD may continue to face as it strives to attain audit 

readiness, including instances in which DOD components prematurely 

asserted audit readiness and missed interim milestones.16 Also, DOD’s 

efforts over the past couple of years to achieve audit readiness for some 

significant SBR assessable units have not been successful. However, 

these experiences can serve to provide lessons for DOD and its 

components to consider in addressing the department’s auditability 

challenges.

DOD’s ability to achieve departmentwide audit readiness is highly 

dependent on its military components’ ability to effectively develop and 

implement FIPs in compliance with DOD’s FIAR Guidance. However, in 

our September 2011 report, we identified several instances in which the 

components did not prepare FIPs that fully complied with the FIAR 

Guidance, resulting in premature assertions of audit readiness.

Specifically, as we reported in September 2011, the FIAR Guidance 

provides a reasonable methodology for the DOD components to follow in 

developing and implementing their FIPs.17

 

16GAO, DOD Financial Management: Improvement Needed in DOD Components’ 

Implementation of Audit Readiness Effort, 

It details the roles and 

responsibilities of the DOD components, and prescribes a standard, 

systematic approach that components should follow to assess processes, 

controls, and systems, and identify and correct weaknesses in order to 

achieve auditability. When DOD components determine that sufficient 

financial improvement efforts have been completed for an assessable unit 

in accordance with the FIAR Guidance and that the assessable unit is 

ready for audit, the FIP documentation is used to support the conclusion 

of audit readiness. Thus, complying with the FIAR Guidance can provide 

a consistent, systematic means for DOD components to achieve and 

verify audit readiness incrementally.

GAO-11-851 (Washington, D.C.: Sept. 13, 

2011).

17GAO-11-851. 

DOD Component 

Compliance with FIAR 

Guidance Is Crucial to 

Ensuring Audit Readiness
 

Page 9 GAO-12-642T 

We found that when DOD components did not prepare FIPs that fully 

complied with the FIAR Guidance, they made assertions of audit 

readiness prematurely and did not achieve interim milestones.18 While the 

components initially appeared to meet some milestones by asserting 

audit readiness in a timely manner, reviews of supporting documentation 

for the FIPs of two assessable units and attempts to audit the Marine 

Corps’ SBR revealed that the milestones had not been met because the 

assessable units were not actually ready for audit. For example, the Navy 

asserted audit readiness for its civilian pay in March 2010 and the Air 

Force asserted audit readiness for its military equipment in December 

2010. However, we reported that neither component had adequately 

developed and implemented their FIPs for these assessable units in 

accordance with the FIAR Guidance and were therefore not ready for 

audit. The Marine Corps first asserted financial audit readiness for its 

General Fund SBR on September 15, 2008. The DOD IG reviewed the 

Marine Corps’ assertion package and on April 10, 2009, reported that the 

assertion of audit readiness was not accurate, and that its documentation 

supporting the assertion was not complete. GAO has made prior 

recommendations to address these issues. DOD has generally agreed 

with these recommendations and is taking corrective actions in response. 

The Secretary of Defense’s direction to achieve audit readiness for the 

SBR by the end of 2014 necessitated that DOD’s components revise 

some of their plans and put more focus on short-term efforts to develop 

accurate data for the SBR in order to achieve this new accelerated goal.19

In August 2011, DOD’s military components achieved one milestone 

toward SBR auditability when they all received validation by an 

independent public accounting firm that their Appropriations Receipt and 

Distribution—a section of the SBR—was ready for audit. In addition, the 

November 2011 FIAR Plan Status Report indicated that the Air Force 

achieved audit readiness for its Fund Balance with Treasury (FBWT). 

 

18GAO-11-851. 

19In addition to requiring audit readiness of the SBR, the Secretary’s memo also directed 

the DOD Comptroller to increase emphasis on accountability for assets; execute a full 

review of the department’s financial controls over the next 2 years and establish interim 

goals for assessing progress; ensure mandatory training for audit and other key financial 

efforts, and establish a pilot certification program for financial managers; appropriately 

resource efforts to meet these goals; and meet the legal requirement for full financial 

statement audit readiness by 2017. 

Reported DOD Progress 

toward Audit Readiness 

for the Statement of 

Budgetary Resources 
 

Page 10 GAO-12-642T 

Further, in a February 2012 briefing on its accelerated plans, DOD 

indicated that 7 of 24 material general fund Defense Agencies and Other 

Defense Organizations are either already sustaining SBR audits or are 

ready to have their SBRs audited.20

• the Army’s inability to locate and provide supporting documentation 

for its military pay;

These accomplishments represent 

important positive steps. Nevertheless, achieving audit readiness for the 

military components’ SBRs is likely to pose significant challenges based 

on the long-standing financial management weaknesses and audit issues 

affecting key SBR assessable units. Our recent reports highlight some of 

the difficulties that the components have experienced recently related to 

achieving an auditable SBR, including

21

• the Navy’s and the Marine Corps’ inability to reconcile their Fund 

Balance with Treasury accounts;

22

• the Marine Corps’ inability to provide sufficient documentation to 

auditors of its SBR.

and

23

To achieve SBR audit readiness by 2014, DOD and its components need 

accelerated, yet feasible, well-developed plans for identifying and 

correcting weaknesses in the myriad processes involved in producing the 

data needed for the SBR. While DOD has developed an accelerated 

FIAR Plan to provide an overall view of the department’s approach for 

meeting the 2014 goal, most of the work must be carried out at the 

component level.

 

20According to the February 2012 accelerated plan, the seven Defense Agencies and 

Other Defense Organizations that are already sustaining SBR audits are the Defense 

Finance and Accounting Service (DFAS), Defense Contract Audit Agency (DCAA), 

TRICARE Management Activity—Contract Resource Management, Defense Commissary 

Agency, Medicare Eligible Retiree Healthcare Fund, Military Retirement Fund, and the 

DOD Office of the Inspector General. 

21GAO, DOD Financial Management: The Army Faces Significant Challenges in Achieving 

Audit Readiness for Its Military Pay, GAO-12-501T (Washington, D.C.: March 22, 2012). 

22GAO, DOD Financial Management: Ongoing Challenges with Reconciling Navy and 

Marine Corps Fund Balance with Treasury, GAO-12-132 (Washington, D.C.: Dec. 20, 

2011). 

23GAO, DOD Financial Management : Marine Corps Statement of Budgetary Resources 

Audit Results and Lessons Learned, GAO-11-830 (Washington, D.C.: Sept. 15, 2011). 
 

Page 11 GAO-12-642T 

The Army’s active duty military payroll, reported at $46.1 billion for fiscal 

year 2010, made up about 20 percent of its reported net outlays for that 

year. As such, it is significant to both Army and DOD efforts for achieving 

auditability for the SBR. For years, we and others have reported 

continuing deficiencies in the Army’s military payroll processes and 

controls.24

In March 2012, we reported that the Army could not readily identify a 

complete population of its payroll accounts for fiscal year 2010.

Moreover, other military components such as the Air Force and 

the Navy share some of these same military payroll deficiencies.

25

In addition, the Army and DFAS-IN were unable to provide documentation 

to support the validity and accuracy of a sample of fiscal year 2010 

payroll transactions we selected for review. For example, DFAS-IN had 

difficulty retrieving and providing usable Leave and Earnings Statement 

files and the Army was unable to locate or provide supporting personnel 

DOD’s 

FIAR Guidance states that identifying the population of transactions is a 

key task essential to achieving audit readiness. However, the Army and 

DFAS-Indianapolis (DFAS-IN), which is responsible for accounting, 

disbursing, and reporting for the Army’s military personnel costs, did not 

have an effective, repeatable process for identifying the population of 

active duty payroll records. For example, it took 3 months and repeated 

attempts before DFAS-IN could provide a population of service members 

who received active duty Army military pay in fiscal year 2010. Further, 

because the Army does not have an integrated military personnel and 

payroll system, it was necessary to compare the payroll file to active Army 

personnel records. However, DOD’s central repository for information on 

DOD-affiliated personnel did not have an effective process for comparing 

military pay account files with military personnel files to identify a valid 

population of military payroll transactions.

 

24DOD Inspector General, Active Duty Military Personnel Accounts Were Generally Valid 

and Secure, but DoD May have Made Improper Payments, D-2011-093 (Arlington, Va.: 

July 27, 2011); GAO, 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 (Washington, D.C.: June 18, 

2009); Military Pay: Hundreds of Battle-Injured GWOT Soldiers Have Struggled to Resolve 

Military Debts, GAO-06-494 (Washington, D.C.: Apr. 27, 2006); Military Pay: Army 

National Guard Personnel Mobilized to Active Duty Experienced Significant Pay Problems, 

GAO-04-89 (Washington, D.C.: Nov. 13, 2003).

25GAO, DOD Financial Management: The Army Faces Significant Challenges in Achieving 

Audit Readiness for Its Military Pay, GAO-12-406 (Washington, D.C.: Mar. 22, 2012).

Army’s Inability to Locate and 

Provide Supporting 

Documentation for Military Pay 
 

Page 12 GAO-12-642T 

documents for a statistical sample of fiscal year 2010 Army military pay 

accounts. At the end of September 2011, 6 months after we had provided 

them with our sample of 250 items, the Army and DFAS-IN were able to 

provide complete documentation for only 2 of the sample items and 

provided only partial documentation for another 3 items; they were unable 

to provide any documentation for the remaining 245 sample items.

At of the time of our report, the Army had several military pay audit 

readiness efforts planned or under way. Timely and effective 

implementation of these efforts could help reduce the risk of DOD not 

achieving the SBR audit readiness goal of 2014. However, most of these 

actions are in the early planning stages. Moreover, these initiatives, while 

important, do not address (1) establishing effective processes and 

systems for identifying a valid population of military payroll records, (2) 

ensuring Leave and Earnings Statement files and supporting personnel 

documents are readily available for verifying the accuracy of payroll 

records, (3) ensuring key personnel and other pay-related documents that 

support military payroll transactions are centrally located, retained in 

service member Official Military Personnel Files, or are otherwise readily 

accessible, and (4) requiring the Army’s Human Resources Command to 

periodically review and confirm that service members’ Official Military 

Personnel File records are consistent and complete to support annual 

financial audit requirements. GAO has made prior recommendations to 

address these issues. DOD has agreed with these recommendations and 

is taking corrective actions in response.

A successful audit of the SBR is dependent on the ability to reconcile an 

agency’s Fund Balance with Treasury (FBWT) with the Treasury records.

FBWT is an account that reflects an agency’s available budget spending 

authority by tracking its collections and disbursements. Reconciling a 

FBWT account with Treasury records is a process similar in concept to 

reconciling a check book with a bank statement. In December 2011, we 

reported that neither the Navy nor the Marine Corps had implemented 

effective processes for reconciling their FBWT.26

The Navy and the Marine Corps rely on the DFAS location in Cleveland 

(DFAS-CL) to perform their FBWT reconciliations. We found numerous 

deficiencies in DFAS processes that impair the Navy’s and the Marine 

 

26GAO-12-132.

Navy’s and Marine Corps’

Inability to Reconcile Fund 

Balance with Treasury 
 

Page 13 GAO-12-642T 

Corps’ ability to effectively reconcile their FBWT with Treasury records, 

including the following. 

• There are significant data reliability issues with the Defense Cash 

Accountability System (DCAS), which records daily collections and 

disbursements activity. The Navy and Marine Corps rely on DCAS to 

reconcile their FBWT to Treasury records.

• DFAS-CL did not maintain adequate documentation for the sample 

items we tested to enable an independent evaluation of its efforts to 

research and resolve differences.

• DFAS-CL recorded unsupported entries (plugs) to force Navy and 

Marine Corps appropriation balances to agree with those reported by 

Treasury instead of investigating and resolving differences between 

these two services’ appropriation balances and those maintained by 

Treasury.

Navy, Marine Corps, and DFAS-CL officials acknowledged that existing 

FBWT policies and procedures were inadequate. Navy and DFAS-CL 

officials stated that the base realignment and closure changes from 2006 

through 2008 resulted in loss of experienced DFAS-CL personnel and 

that remaining staff have not received the needed training. In response to 

our recommendations, the Navy developed a plan of action and 

milestones (POAM) intended to address the Navy’s audit readiness 

weaknesses, including FBWT required reconciliations.

The Marine Corps received disclaimers of opinion from its auditors on its 

fiscal year 2010 and 2011 SBRs because it could not provide supporting 

documentation in a timely manner, and support for transactions was 

missing or incomplete. Further, the Marine Corps had not resolved 

significant accounting and information technology (IT) system 

weaknesses identified in the fiscal year 2010 SBR audit effort.

The auditors also reported that the Marine Corps did not have adequate 

processes and controls, including systems controls, for accounting and 

reporting on the use of budgetary resources. Further, the Marine Corps 

could not provide evidence that reconciliations for key accounts (such as 

FBWT) and processes were being performed on a monthly basis. The 

auditors also identified ineffective controls in key IT systems used by the 

Marine Corps to process financial data. During fiscal year 2011, however, 

the Marine Corps was able to demonstrate progress toward auditability. 

For example, its auditors confirmed that as of October 2011, the Marine 

Corps had fully implemented 32 out of 139 fiscal year 2010 audit 

recommendations.

Difficulty in Auditing the 

Marine Corps’ Statement of 

Budgetary Resources
 

Page 14 GAO-12-642T 

The results of the audit for fiscal year 2010 provided valuable lessons on 

preparing for a first-time financial statement audit. In our September 2011 

report, we identified five fundamental lessons that are critical to 

success.27 Specifically, the Marine Corps’ experience demonstrated that 

prior to asserting financial statement audit readiness, DOD components 

must (1) confirm completeness of populations of transactions and 

address any abnormal transactions and balances, (2) test beginning 

balances, (3) perform key reconciliations, (4) provide timely and complete 

responses to audit documentation requests, and (5) verify that key IT 

systems are compliant with the Federal Financial Management 

Improvement Act of 199628

These issues are addressed in GAO’s Standards for Internal Control in 

the Federal Government

and are auditable. GAO has made prior 

recommendations to address these issues. DOD has generally agreed 

with these recommendations and is taking corrective actions in response.

29

In its November 2011 FIAR Plan, DOD provided an overall view of its 

accelerated FIAR Plan for achieving audit readiness of its SBR by the end 

of fiscal year 2014. In its February 2012 briefing, DOD recognized key 

factors that are needed to achieve auditability such as the consistent 

involvement of senior leadership as well as the buy-in of field 

commanders who ultimately must implement many of the changes 

needed. The plan also provided interim milestones for DOD components 

such as the Army, Navy, Air Force, Defense Logistics Agency, and other 

defense agencies. Acceleration substantially compresses the time allotted 

for achieving some of these milestones. For example, the May 2011 FIAR 

Plan Status Report indicated that the Air Force had planned to validate its 

and DOD’s FIAR Guidance. During our audit, 

Navy, Army, and Air Force FIP officials stated that they were aware of the 

Marine Corps lessons and were planning to, or had, incorporated them to 

varying degrees into their audit readiness plans.

 

27GAO-11-830. 

28CFO Act agencies’ financial management systems are required by the Federal Financial 

Management Improvement Act of 1996 (FFMIA) to comply with federal financial 

management systems requirements, applicable federal accounting standards, and the 

United States Government Standard General Ledger at the transaction level, Pub. L. No. 

104-208, div. A, title VIII, § 803, 110 Stat. 3009, 3009-390 (Sept. 30, 1996).

29GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1 

(Washington, D.C.: November 1999). 

Accelerated Plans for SBR Are 

in Progress
 

Page 15 GAO-12-642T 

audit readiness for many SBR-related assessable units in fiscal year 2016 

and that its full SBR would not be ready for audit until 2017. However, the 

February 2012 briefing on the accelerated plans indicated that most of the 

Air Force’s SBR assessable units will be audit-ready in fiscal years 2013 

or 2014. These revised dates reflect the need to meet the expedited audit 

readiness goal of 2014. (See figure 2.)

Figure 2: Changes in SBR Interim Milestones

As discussed earlier, the key to audit readiness is for DOD components to 

effectively develop and implement FIPs for SBR assessable units, and to 

meet interim milestones as they work toward the 2014 goal. According to 

Navy officials, the Navy plans to prepare a FIP for each of several 

assessable units that make up the SBR. For example, for its SBR, Navy 
 

Page 16 GAO-12-642T 

officials told us they have identified assessable units for appropriations 

received, and for various types of expenditures for which funds are first 

obligated and then disbursed, such as military pay, civilian pay, contracts, 

and transportation of people. The Air Force will prepare FIPs for 

assessable units similar to those of the Navy. Army officials told us they 

are taking a different approach from the Navy. They said that instead of 

developing FIPs for discrete assessable units constituting the SBR, they 

are preparing only one FIP for one audit readiness date for the Army’s 

entire SBR, an approach similar to that of the Marine Corps.

For years, DOD has been developing and implementing enterprise 

resource planning (ERP) systems, which are intended to be the backbone 

to improved financial management.30 DOD considers the successful 

implementation of these ERP systems critical to transforming its business 

operations and addressing long-standing weaknesses in areas such as 

financial and supply-chain management and business systems 

modernization. DOD officials have also stated that these systems are 

critical to ensuring the department meets its mandated September 30, 

2017, goal to have auditable departmentwide financial statements.

However, as we recently reported, six of these ERP systems are not 

scheduled to be fully deployed until either fiscal year 2017 or the end of 

fiscal year 2016.31

The DOD IG reported that the Navy developed and approved deployment 

of the Navy ERP System without ensuring that the system complied with 

DOD’s Standard Financial Information Structure (SFIS) and the U.S. 

Government Standard General Ledger.32

 

30An ERP system is an automated system using commercial off-the-shelf software 

consisting of multiple, integrated functional modules that perform a variety of businessrelated tasks such as general ledger accounting, payroll, and supply chain management. 

The DOD IG further stated that 

as a result, the Navy ERP System, which is expected to manage 54 

percent of the Navy’s obligation authority when fully deployed, might not 

produce accurate and reliable financial information.

32DOD Inspector General, Navy Enterprise Resource Planning System Does Not Comply 

With the Standard Financial Information Structure and U.S. Government Standard 

General Ledger, DODIG-2012-051 (Arlington, Va.: Feb. 13, 2012).

32DOD Inspector General, Navy Enterprise Resource Planning System Does Not Comply 

With the Standard Financial Information Structure and U.S. Government Standard 

General Ledger, DODIG-2012-051 (Arlington, Va.: Feb. 13, 2012).

Effective 

Implementation of 

Business Systems Is 

Critical
 

Page 17 GAO-12-642T 

Two ERP systems—the Army’s General Fund Enterprise Business 

System (GFEBS) and the Air Force’s Defense Enterprise Accounting and 

Management System (DEAMS)—are general ledger systems intended to 

support a wide range of financial management and accounting functions.

However, DFAS users of these systems told us that they were having 

difficulties using the systems to perform their daily operations. Problems 

identified by DFAS users included interoperability deficiencies between 

legacy systems and the new ERP systems, lack of query and ad hoc 

reporting capabilities, and reduced visibility for tracing transactions to 

resolve accounting differences. For example:

• Approximately two-thirds of invoice and receipt data must be manually 

entered into GFEBS from the invoicing and receiving system due to 

interface problems. Army officials explained that the primary cause of 

the problem was that the interface specification that GFEBS is 

required by DOD to use did not provide the same level of functionality 

as the interface specification used by the legacy systems. At the time 

of our review, Army officials stated that they are working with DOD to 

resolve the problem, but no time frame for resolution had been 

established.

• DEAMS did not provide the capability—which existed in the legacy 

systems—to produce ad hoc query reports that could be used to 

perform data analysis needed for day-to-day operations. DFAS 

officials noted that when DEAMS did produce requested reports, the 

accuracy of those reports was questionable. According to DFAS 

officials, they are currently working with DEAMS financial 

management to design the type of reports that DFAS needs.

While we were told that as of February 2012, the Army and the Air Force 

had corrective actions under way to address identified deficiencies, 

specific timelines had not been developed so that progress could be 

monitored.33

In February 2012, we reported that independent assessments of four 

ERPs—the Army’s GFEBS and Global Combat Support System (GCSSArmy), and the Air Force’s DEAMS and Expeditionary Combat Support 

System (ECSS)—identified operational problems, such as deficiencies in 

 

33GAO, DOD Financial Management: Implementation Weaknesses in Army and Air Force 

Business Systems Could Jeopardize DOD’s Auditability Goals, GAO-12-134 (Washington, 

D.C.: Feb. 28, 2012)
 

Page 18 GAO-12-642T 

data accuracy, inability to generate auditable financial reports, the need 

for manual workarounds, and training.34

In addition to functional issues, we found that training was inadequate. 

According to DFAS personnel as of February 2012, the training they 

received for GFEBS and DEAMS did not fully meet their needs. DFAS 

personnel informed us that the training focused on an overview of GFEBS 

and DEAMS and how the systems were supposed to operate. While this 

was beneficial in identifying how GFEBS and DEAMS were different from 

the existing legacy systems, the training focused too much on concepts 

rather than the skills needed for DFAS users to perform their day-to-day 

operations. GAO has made prior recommendations to address these 

issues. DOD has generally agreed with these recommendations and is 

taking corrective actions in response.

DOD oversight authority limited 

the deployment of GFEBS and DEAMS on the basis of the results of the 

independent assessments. However, in June 2011, DOD authorized 

continued deployment of GFEBS and delegated further GFEBS 

deployment decisions to the Under Secretary of the Army.

Improving the department’s business environment through efforts such as 

DOD’s business enterprise architecture and improved business systems 

management is an important part of helping DOD achieve auditability. In 

June 2011, we reported that DOD had continued to make progress in 

implementing a comprehensive business enterprise architecture, 

transition plan, and improved investment control processes.35 However, 

we also reported that long-standing challenges had yet to be addressed. 

Specifically, we reported that while DOD continued to release updates to 

its corporate enterprise architecture, the architecture had yet to be 

augmented by a coherent family of related subsidiary architectures.36

 

34

For 

example, we reported that while each of the military departments had 

developed aspects of a business architecture and transition plan, none of 

them had fully developed a well-defined business enterprise architecture 

GAO-12-134. 

35GAO-11-684. 

36DOD's business enterprise architecture approach calls for a federated approach, in 

which the architecture consists of a family of coherent but distinct member architectures 

that conform to an overarching corporate or parent architecture. 

Challenges in 

Developing and 

Implementing DOD’s 

Business Enterprise 

Architecture and 

Investment Control 

Processes
 

Page 19 GAO-12-642T 

and transition plan to guide and constrain business transformation 

initiatives.37

We also reported in June 2011 that DOD continued to improve its 

business system investment management processes, but that much 

remained to be accomplished to align these processes with investment 

management practices associated with individual projects and with 

portfolios of projects.38

Since 2001, we have made recommendations to improve DOD’s business 

architecture, enterprise transition plan, and business system investment 

With regard to individual projects, DOD and the 

military departments all had documented policies and procedures for 

identifying and collecting information about IT projects and systems to 

support their business system investment management processes. 

However, neither DOD nor the military departments had fully documented 

policies and procedures for selecting a new investment, reselecting 

ongoing investments, integrating funding with investment selection, or 

management oversight of IT projects and systems. With regard to 

portfolios of projects, DOD and the Departments of the Air Force and 

Navy had assigned responsibility for managing the development and 

modification of IT portfolio selection criteria. However, neither DOD nor 

the military departments had fully documented policies and procedures 

for creating and modifying IT portfolio selection criteria; analyzing, 

selecting, and maintaining their investment portfolios; reviewing, 

evaluating, and improving the performance of their portfolios; or 

conducting post implementation reviews. In addition, while DOD largely 

followed its certification and oversight processes, we reported that key 

steps were not performed. For example, as part of the certification 

process, DOD assessed investment alignment with the business 

enterprise architecture, but did not validate the results of this assessment, 

thus increasing the risk that decisions regarding certification would be 

based on inaccurate and unreliable information.

 

37GAO-11-684. 

38These best practices are identified in GAO IT investment management guidance. See 

GAO, Information Technology Investment Management: A Framework for Assessing and 

Improving Process Maturity, GAO-04-394G (Washington, D.C.: Mar. 2004). 
 

Page 20 GAO-12-642T 

management.39 DOD has generally agreed with these recommendations 

and is taking corrective actions in response. It is essential that DOD 

implement our recommendations aimed at addressing these longstanding challenges, as doing so is critical to the department’s ability to 

establish the full range of institutional management controls needed for its 

financial management as well as its overall business systems 

modernization high-risk program. We have ongoing work to evaluate the 

department’s efforts to comply with the NDAA for Fiscal Year 2012, as 

amended, including updating our evaluations of DOD’s comprehensive 

business enterprise architecture and transition plan and improved 

investment control processes.

Section 1072 of the NDAA for Fiscal Year 2010 requires that new DOD 

programs be assessed to determine whether or not appropriate businessprocess reengineering efforts have been undertaken. The act further 

states that these efforts should ensure that (1) the business process to be 

supported by the defense business system modernization will be as 

streamlined and efficient as practicable and (2) the need to tailor 

commercial-off-the-shelf systems to meet unique requirements or 

incorporate unique interfaces has been eliminated or reduced to the 

maximum extent practicable.40

 

39See, for example, GAO, Information Technology: Architecture Needed to Guide 

Modernization of DOD’s Financial Operations, 

In June 2011, we reported that, for those 

investments we reviewed, DOD and the military departments used DOD’s 

Business Process Reengineering Guidance (dated April 2011) to assess 

GAO-01-525 (Washington, D.C.: May 17, 

2001); DOD Business Systems Modernization: Improvements to Enterprise Architecture 

Development and Implementation Efforts Needed, GAO-03-458 (Washington, D.C.: Feb. 

28, 2003); Business Systems Modernization: DOD Continues to Improve Institutional 

Approach, but Further Steps Needed, GAO-06-658 (Washington, D.C.: May 15, 2006); 

Business Systems Modernization: Strategy for Evolving DOD's Business Enterprise 

Architecture Offers a Conceptual Approach, but Execution Details Are Needed, GAO-07-

451 (Washington, D.C.: Apr. 16, 2007); Business Systems Modernization: DOD Needs to 

Fully Define Policies and Procedures for Institutionally Managing Investments, GAO-07-

538 (Washington, D.C.: May 11, 2007); DOD Business Systems Modernization: Progress 

in Establishing Corporate Management Controls Needs to Be Replicated Within Military 

Departments, GAO-08-705 (Washington, D.C.: May 15, 2008); DOD Business Systems 

Modernization: Recent Slowdown in Institutionalizing Key Management Controls Needs to 

Be Addressed, GAO-09-586 (Washington, D.C.: May 18, 2009); Organizational 

Transformation: Military Departments Can Improve Their Enterprise Architecture 

Programs, GAO-11-902 (Washington, D.C., Sept. 26, 2011). 

40Pub. L. No.111-84, § 1072.

DOD Has Begun 

Performing BusinessProcess 

Reengineering 

Assessments
 

Page 21 GAO-12-642T 

whether the investments complied with the business-process 

reengineering requirement.41

We also reported in June 2011 that while DOD and the military 

departments largely followed DOD’s guidance, they did not perform the 

key step of validating the results of these reengineering assessments to 

ensure that they, among other things, accurately assessed process 

weaknesses and identified opportunities to streamline and improve 

affected processes. The reason DOD did not follow key aspects of the 

certification process—primarily not validating assessment results—was 

attributed in part to unclear roles and responsibilities. According to military 

department officials responsible for the investments we reviewed, 

validation activities did not occur because DOD policy and guidance did 

not explicitly require them to be performed. In addition, there was no 

guidance that specified how assessments should be validated. According 

to DOD officials, the oversight and designated approval authorities did not 

validate the DOD level assessments and assertions because DOD policy 

and guidance had not yet been revised to require these authorities to do 

so. We have work underway to evaluate DOD’s efforts to improve its 

business system investment process, including its efforts to address the 

act’s business process reengineering requirement. GAO has made prior 

recommendations to address these issues. DOD has agreed with these 

recommendations and is taking corrective actions in response.

Consistent with the guidance, DOD and the 

military departments completed questionnaires to help them identify and 

develop approaches to streamlining and improving existing business 

processes. Once these assessments had been completed, the 

appropriate authorities asserted that business-process reengineering 

assessments had been performed.

In closing, DOD has demonstrated leadership and sustained commitment 

since the first issuance of its FIAR Plan in 2005 and through 

improvements and responsiveness to our recommendations since then. 

DOD has made progress through the FIAR Guidance, with the 

development of a methodology for implementing the FIAR strategy. Full 

compliance with the guidance can provide a consistent, systematic 

process to help DOD components achieve and verify audit readiness. 

Without full compliance, as we have seen in our work, components may 

 

41GAO-11-684. 

Concluding 

Observations
 

Page 22 GAO-12-642T 

assert audit readiness while process deficiencies prevent validation, 

require corrective actions, and delay an audit for another fiscal year.

Automated information systems are essential for modern accounting and 

recordkeeping. DOD is developing its ERP systems as the backbone of 

its financial management improvement and they are critical for 

transforming its business operations. To be fully successful, 

implementation of ERP systems should be consistent with an effective 

corporate enterprise architecture and the development of streamlined 

business processes. DOD officials have stated that these systems are 

critical to ensuring that the department meets its mandated September 

30, 2017, goal to have auditable departmentwide financial statements. 

However, implementation has been delayed by deficiencies in 

performance and the need for remedial corrective actions. DOD 

components will evaluate cost-effective modifications to legacy systems 

and implement any necessary changes. According to DOD officials, for 

the ERP systems that will not be fully deployed prior to the audit 

readiness goals, the DOD components will need to identify effective 

workaround processes or modifications to legacy systems that will enable 

audit readiness.

DOD faces considerable implementation challenges and has much work 

to do if it is to meet the goals of an auditable SBR by fiscal year 2014 and 

a complete set of auditable financial statements by fiscal year 2017. It is 

critical that DOD continue to build on its current initiatives. Oversight and 

monitoring will also play a key role in making sure that DOD’s plans are 

implemented as intended and that lessons learned are identified and 

effectively disseminated and addressed. Absent continued momentum 

and necessary future investments, the current initiatives may falter, 

similar to previous well-intended, but ultimately failed, efforts.

We will continue to monitor the progress and provide feedback on the 

status of DOD’s financial management improvement efforts. We currently 

have work in progress to assess (1) the FIAR Plan’s risk management 

process for identifying, assessing, and addressing risks that may impede 

DOD’s ability to achieve the 2017 financial audit readiness goal; (2) 

DOD’s funds control in relation to the reliability of its financial statements; 

(3) the schedule and cost of Army’s GCSS; (4) components’ efforts to 

prepare for SBR and full financial statement audits; and (5) DOD’s actions 

in response to our recommendations. As a final point, I want to 

emphasize the value of sustained congressional interest in the 

department’s financial management improvement efforts, as 

demonstrated by this subcommittee’s leadership.
 

Page 23 GAO-12-642T 

Chairman McCaskill, Ranking Member Ayotte, and members of the 

subcommittee, this completes my prepared statement. I would be pleased 

to respond to any questions that you may have at this time.

If you or your staff have any questions about this testimony please 

contact me at (202) 512-9869 or khana@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this testimony. GAO staff who made key contributions to 

this testimony include Valerie Melvin, Director; Cindy Brown Barnes, 

Assistant Director; Mark Bird, Assistant Director; Kristi Karls; Michael 

Holland, Chris Yfantis, and Maxine Hattery.

GAO Contacts and 

Staff 

Acknowledgments

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