DOD Financial Management: Effect of Continuing Weaknesses on Management and Operations and Status of Key Challenges
Published: 2014-05-13T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Given the federal government's continuing 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 to help ensure fiscal responsibility and demonstrate accountability, particularly for the federal government's largest department, the Department of Defense. GAO has previously reported that serious and continuing deficiencies in DOD's financial management make up one of three major impediments to achieving an opinion on the U.S. government's consolidated financial statements.
GAO's statement focuses on (1) the effect of continuing financial management challenges on DOD management and operations and (2) DOD's efforts to improve financial management and its remaining challenges. GAO's statement is primarily based on previously issued reports, including GAO's updates on DOD high-risk areas and its audit reports on DOD's financial management, inventory management and asset visibility, weapon system costs, business transformation, and business system modernization.
section_title: What GAO Found
paragraphs: Long-standing weaknesses in the Department of Defense's (DOD) financial management adversely affect the economy, efficiency, and effectiveness of its operations. The successful transformation of DOD's financial management processes and operations will allow DOD to routinely generate timely, complete, and reliable financial and other information for day-to-day decision making, including the information needed to effectively (1) manage its assets, (2) assess program performance and make budget decisions, (3) make cost-effective operational choices, and (4) provide accountability over the use of public funds. Examples of the operational impact of DOD's financial management weaknesses include
the inability to properly account for and report DOD's total assets—about 33 percent of the federal government's reported total assets—including inventory ($254 billion) and property, plant, and equipment ($1.3 trillion);
the inability to accurately estimate the extent of its improper payments because of a flawed estimating methodology, which also limits corrective actions;
inconsistent and sometimes unreliable reports to the Congress on estimated weapon system operating and support costs, limiting visibility needed for effective oversight of these costs; and
continuing reports of Antideficiency Act violations—75 such violations reported from fiscal year 2007 through fiscal year 2012, totaling nearly $1.1 billion—which emphasize DOD's inability to ensure that obligations and expenditures are properly recorded and do not exceed statutory levels of control.
DOD has numerous efforts under way to address its long-standing financial management weaknesses. The Congress has played a major role in many of the corrective actions by mandating them in various fiscal year National Defense Authorization Acts. However, improving the department's financial management operations and thereby providing DOD management and the Congress more accurate and reliable information on the results of its business operations will not be an easy task. Key challenges remain, such as identifying and mitigating risks to achieving the goals of DOD's Financial Improvement and Audit Readiness (FIAR) effort and successfully implementing the FIAR Guidance at the DOD component level, modernizing DOD's business information systems, and improving the financial management workforce.
DOD is monitoring its component agencies' progress toward audit readiness. However, as dates for validating audit readiness approach, DOD has emphasized asserting audit readiness by a certain date instead of making sure that effective processes, systems, and controls are in place, without which it cannot ensure that its components have improved financial management information for day-to-day decision making. While time frames are important to measuring progress, DOD should not lose sight of the ultimate goal of implementing lasting financial management reform to ensure that it can routinely generate reliable financial management and other information critical to decision making and effective operations.
section_title: What GAO Recommends
paragraphs: GAO has previously made numerous recommendations for improving financial systems and business systems that provide financial information as well as related processes and internal controls. DOD has generally agreed with GAO's recommendations and is taking actions to address many of them.

section_title: Letter
paragraphs: Thank you for the opportunity to be here today to discuss continuing  Department of Defense (DOD) financial management challenges and the  implications for its management and operations and audit readiness.  Having sound financial management practices and reliable, timely  financial information is important to ensure accountability over DOD’s  extensive resources in order to efficiently and economically manage the  department’s assets, budgets, mission, and operations. Accomplishing  this goal is a significant challenge given the worldwide scope of DOD’s  mission and operations; the diversity, size, and culture of the  organization; and its reported trillions of dollars of assets and liabilities  and its hundreds of billions of dollars in annual appropriations.
Given the federal government’s continuing 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 to help ensure fiscal responsibility and demonstrate  accountability, particularly for the federal government’s largest  department. Serious, continuing deficiencies in DOD’s financial  management have precluded it from producing financial statements that  can be audited, and these deficiencies constitute one of three major  impediments to achieving an opinion on the U.S. government’s  consolidated financial statements. Our report on the U.S. government’s  fiscal year 2013 financial statements highlighted significant DOD  weaknesses that contributed to our disclaimer of opinion. They include  the following:
The inability to determine that DOD’s total assets were properly  reported. For fiscal year 2013, DOD accounted for about 33 percent of  the federal government’s reported total assets, including inventory  ($254 billion) and property, plant, and equipment ($1.3 trillion).
Unreliable reported estimates of environmental cleanup and disposal  liabilities ($58.4 billion) and retiree health care liabilities ($1.1 trillion).  Ineffective financial management processes and controls.
Financial management systems that do not comply with the Federal  Financial Management Improvement Act of 1996 (FFMIA).
In addition to the impact on the auditability of the U.S. government’s  consolidated financial statements, these problems impede DOD’s ability  to produce timely and accurate financial management information to  assist in day-to-day decision making and also significantly impair efforts  to improve the economy, efficiency, and accountability of the  department’s operations. Key areas of concern relate to ineffective asset  control and accountability, which affect DOD’s visibility over weapon  systems and inventory;  unreliable budget information, which affects  DOD’s ability to effectively measure performance, reduce costs, and  maintain adequate control of its funds (funds control); and ineffective  business systems and processes, which impair DOD’s ability to achieve  accountability and transparency over its operations and accurately report  on the results of operations. DOD is addressing these issues through its  Financial Improvement and Audit Readiness (FIAR) Plan, which is DOD’s  strategic plan and management tool for guiding, monitoring, and reporting  on the department’s financial management improvement efforts.
DOD describes asset visibility as the ability to provide timely and accurate information on  the location, quantity, condition, movement, and status of items in its inventory, including  assets in transit. its financial statements. Subsequently, the NDAA for Fiscal Year 2013  added that the FIAR Plan must also describe the steps to be taken, with  associated costs, to ensure that the department’s Statement of Budgetary  Resources (SBR) is validated as audit ready no later than September 30,  2014.
My statement today focuses on two topics:  the effect of continuing financial management weaknesses on DOD  management and operations and
DOD’s actions to improve its financial management and achieve audit  readiness, and its remaining challenges.
My statement is primarily based on previously issued reports, including  our reporting on DOD high-risk areas and our audit reports on DOD’s  financial management, inventory management controls and asset  visibility, weapon system costs, business transformation, business system  modernization, improper payments, military payroll, and audit risk. A list of  related products is included at the end of this statement. This statement  also is based on our ongoing analyses of the Army’s SBR audit readiness  efforts and the Defense Finance and Accounting Service’s (DFAS) audit  readiness efforts for DOD payments to contractors, or “contract pay.” We  expect to report the final results from this work in June 2014. For our  analyses, we reviewed Army and DFAS documentation, such as  departmental guidance and Army and DFAS action plans and statuses,  and met with component officials to discuss the basis and timing of their  audit readiness assertions. We discussed the preliminary results of our  work with cognizant DOD officials.
The work on which this statement 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 that 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 the previously issued products cited in this  statement.
subsections: section_title: Background
paragraphs: In the face of continuing reports of financial management weaknesses  across the federal government, including wasteful spending, poor  management, and losses totaling billions of dollars, the Chief Financial  Officers (CFO) Act of 1990 was signed into law. The act focuses on establishing a leadership structure; improving systems of accounting, financial management, and internal  control; and enabling effective management and oversight through the production  of complete, reliable, timely, and consistent financial information.
With the foundation of the CFO Act and the Government Management  Reform Act of 1994 (GMRA), with its goal “to provide a more effective,  efficient and responsive government,” along with other federal agency  management reform legislation, such as the Government Performance  and Results Act of 1993 (GPRA) and FFMIA, a framework was put in  place to improve stewardship, accountability, and transparency in the  executive branch. Major goals of the reform legislation have included the  following:
Strengthening internal control. Accountability is part of the  organizational culture that goes well beyond receiving an unmodified  or “clean” audit opinion on agency financial statements; the underlying  premise is that agencies must become more results oriented and  focused on internal control. Thousands of internal control problems  have been identified and corrected in executive branch agencies over  the past two decades. A disciplined and structured approach to  assessing and dealing with internal controls over the critical flow of  funds through the entire agency provides a mechanism that over time  mitigates potential damaging breakdowns in financial integrity and  mismanagement of funds. Such breakdowns can affect the ability of  the agency or entity to carry out its mission and can severely damage  public confidence.
Accurate accounting and financial reporting. The CFO Act and  FFMIA provide for financial management systems that support reliable  financial reporting on the results of operations on a day-to-day basis.  This functionality, in turn, supports management decision making on  budgets, programs, and overall mission performance and goals.  Accurate accounting and financial reporting are also a major element  of any effort to achieve auditable financial statements.
Improving performance information. A key goal of much of the  federal management reform legislation enacted over the past 25  years, such as the CFO Act and GPRA, is the ability to have reliable  information to measure performance against mission goals. Federal  agencies have made progress in the preparation of annual  performance and accountability reports (PAR). By linking financial  and performance information, the PARs provide important information  about the return on the taxpayers’ investment in agency programs and  operations.
Enhancing transparency. Achieving clean audit opinions evidencing  sound financial management practices is an overall outcome of  effective implementation of these reforms. For example, the  achievement of a clean audit opinion on the first-ever annual financial  statements for the Troubled Asset Relief Program (TARP) was a  significant accomplishment. This provided important accountability  and transparency to the public regarding TARP activities.
Many of the problems that preceded passage of the CFO Act also led us  to issue our first high-risk list in 1990, designating certain DOD and other  federal programs as high risk because of their vulnerability to fraud,  waste, abuse, and mismanagement. DOD areas designated as high risk in 1990 included Supply Chain Management and Weapon System  Acquisition, followed by Contract Management in 1992, Financial  Management and Business Systems Modernization in 1995, Support  Infrastructure Management in 1997, and Business Transformation in  2005.
As we reported in our latest high-risk update, DOD is one of the few  federal entities that cannot accurately account for its spending or assets  and it is the only federal agency that has yet to receive an opinion on at  least one of its department-wide financial statements. Without accurate,  timely, and useful financial information, DOD is severely hampered in  making sound decisions affecting its operations. Further, to the extent  that current budget constraints and fiscal pressures continue, the  reliability of DOD’s financial information and ability to maintain effective  accountability for its resources will be increasingly important to the federal  government’s ability to make sound resource allocation decisions.  Effective financial management is also fundamental to achieving DOD’s  broader business transformation goals in the areas of asset management,  acquisition and contract management, and business systems  modernization.
section_title: Effect of Continuing Financial Management Weaknesses on DOD Management and Operations
paragraphs: As we have previously reported, long-standing weaknesses in DOD’s  financial management adversely affect the economy, efficiency, and  effectiveness of the department’s operations.and related business management and system deficiencies continue to  adversely affect its ability to control costs; ensure basic accountability;  anticipate future costs and claims on the budget; measure performance;  maintain funds control; prevent and detect fraud, waste, and abuse; and  address pressing management issues. As we have previously  recommended, the successful transformation of DOD’s financial  management processes and operations is necessary for DOD to routinely  generate timely, complete, and reliable financial and other information for   DOD’s pervasive financial  day-to-day decision making, including the information needed to  effectively (1) manage its assets, (2) assess program performance and  make budget decisions, (3) make cost-effective operational choices, and  (4) provide accountability over the use of public funds.
subsections: section_title: Asset Management
paragraphs: Since 1990, we have identified DOD supply chain management as a  high-risk area in part because of ineffective and inefficient inventory  management practices and procedures, weaknesses in accurately  forecasting demand for spare parts, and challenges in achieving  widespread implementation of key technologies aimed at improving asset  visibility.of dollars in spare parts that are excess to current needs, wasting  valuable resources. DOD has made moderate progress in addressing its  supply chain management weaknesses, but several long-standing  problems have not yet been resolved. To provide high-level strategic  direction, DOD issued its Logistics Strategic Plan in July 2010, which  among other things, established a goal to improve supply chain  processes, including inventory management practices and asset visibility.
These factors have contributed to the accumulation of billions  With respect to inventory management, in November 2010, as required  by the Congress, DOD issued its Comprehensive Inventory Management  Improvement Plan, which is aimed at reducing excess inventory by  improving inventory management practices. We reported in 2012 and  2013 that DOD had made progress in reducing its excess inventory and  implementing its Comprehensive Inventory Management Improvement  Plan. DOD established overarching goals in the plan to reduce the  enterprise-wide percentages of on-order excess inventory, those items  already purchased that may be excess due to subsequent changes in  requirements, and on-hand excess inventory, those items categorized for  potential reuse or disposal. Since DOD was exceeding its initial goals for  reducing excess inventory, we recommended that DOD’s efforts would  benefit from establishing more challenging, but achievable, goals for  reducing excess inventory and that the department periodically reexamine  and update its goals. DOD agreed with our recommendations and revised  its on-hand excess inventory goal from 10 percent of the total value of  inventory to 8 percent in fiscal year 2016. However, DOD did not make  any changes to its on-order excess inventory goals and maintained that  its current goals of 6 percent of the total value of on-order inventory in  2014 and 4 percent in 2016 were sufficient. Our work determined that  DOD has made progress in reducing on-hand and on order excess  inventory. For example:
Data from the end of fiscal year 2009 showed that of the about $94.5  billion in on-hand inventory, 9.4 percent, or about $8.8 billion, was  excess. DOD’s most recent fiscal year-end data from September  2013, showed that of the about $98.9 billion in on-hand inventory, 7.3  percent was considered excess.
Data from the end of fiscal year 2009 through 2013 showed that the  department had reduced its percentage of on-order excess inventory  from $13.6 billion to about $10.2 billion, from 9.5 to 7.9 percent, with  $812 million considered as excess.
With respect to asset visibility, we found that DOD needs to take  additional actions to improve asset visibility, to include completing and  implementing its strategy for coordinating improvement efforts across the  department for asset tracking and in-transit visibility. In February 2013,  we reported that DOD had taken steps to improve in-transit visibility of its  assets through efforts developed by several of the defense components,  but no one DOD organization was fully aware of all such efforts across  the department, because they are not centrally tracked.began developing a strategy for asset visibility and in-transit visibility;  however, as of February 2013 this strategy did not include all key  elements of a comprehensive strategic plan. We recommended that the  department finalize its strategy and in doing so ensure complete,  accurate, and consistent information for all in-transit visibility efforts is  captured, tracked, and shared, and the strategy contains all of the key  elements of a comprehensive strategic plan, including resources and  investments and key external factors. DOD agreed with our  recommendation and revised and finalized its asset visibility strategy. We  are currently reviewing the new strategy and the department’s efforts to  improve asset visibility.
GAO, Defense Logistics: Improvements Needed to Enhance DOD’s Management  Approach and Implementation of Item Unique Identification Technology, GAO-12-482  (Washington, D.C.: May 3, 2012). implementing a comprehensive management approach for using IUID  technology.
Effective asset management controls are essential for asset  accountability and safeguarding and financial reporting on asset values.  DOD primarily relies on various logistical systems to carry out both its  stewardship and financial reporting responsibilities for an estimated $1.5  trillion in physical assets, ranging from enormous inventories of  ammunition, stockpile materials, and other military items to multimillion- dollar weapon systems. These systems are the primary source of  information for maintaining visibility over assets to meet military objectives  and readiness goals and for financial reporting. However, our prior reports  and DOD Inspector General (IG) reports have shown that these systems  have serious weaknesses that in addition to hampering financial  reporting, impair DOD’s ability to (1) maintain central visibility over its  assets; (2) safeguard assets from physical deterioration, theft, or loss;  and (3) prevent the purchase of assets already on hand. Collectively,  these weaknesses can seriously diminish the efficiency and economy of  the military services’ support operations.
For example, we have continued to monitor the implementation of the  Army’s Logistics Modernization Program (LMP) system, which supports  both inventory management and financial reporting. In November 2013,  we reported that the Army’s LMP, which replaced two aging Army  systems, is supporting the Army’s industrial operations. However, the  current system—LMP Increment 1—does not support certain critical  requirements, such as automatically tracking repair and manufacturing  operations on the shop floor of depots and arsenals. In addition,  according to Army officials, the current system will not enable the Army to  generate auditable financial statements by 2018, the statutory deadline  for this goal. The Army is in the process of developing LMP Increment 2  to, among other things, address some of the identified weaknesses and  expects to complete fielding by September 2016. To determine whether  the Army is achieving its estimated financial benefits in LMP, we  recommended that the Army develop and implement a process to track  the extent of financial benefits realized from the use of LMP during the  remaining course of its life cycle. The Army agreed with our  recommendation and stated that it would develop a process to track the  extent of financial benefits recognized within LMP. We are continuing to  monitor the Army’s actions.
section_title: Program Performance and Budgeting
paragraphs: Reliable performance and budget information are essential to ensure that  DOD has effectively budgeted for its needs so that operations can  proceed smoothly to meet mission readiness demands. Accurate and  timely performance and budget information also is critical to effective  oversight and decision making on DOD’s numerous reform initiatives.
The following examples illustrate some of the serious weaknesses we  have identified in our past work on DOD’s performance management and  budget information.
In our February 2014 report on the audit of the U.S. government’s  consolidated financial statements, we discussed as a material  weakness, DOD’s inability to estimate with assurance key  components of its environmental and disposal liabilities. Deficiencies  in internal control supporting the process for estimating environmental  and disposal liabilities could result in improperly stated liabilities as  well as adversely affect the ability to determine priorities for cleanup  and disposal activities and to appropriately consider future budgetary  resources needed to carry out these activities. In addition, DOD could  not support a significant amount of its estimated military  postretirement health benefits liabilities for federal employee and  veteran benefits. These unsupported amounts related to the cost of  direct health care provided by DOD-managed military treatment  facilities. Problems in accounting for liabilities affect the determination  of the full cost of the federal governments operations and the extent of  its liabilities. DOD is addressing these issues through its  implementation of its FIAR Plan.
In June 2013, we reported that problems with the accuracy of  outstanding work orders at fiscal year-end for the Army’s Industrial  Operations activities resulted in inaccurate budget estimates. To the  extent that Industrial Operations does not complete work at year-end,  the work and related funding are carried over into the next fiscal year.  Carryover is the reported dollar value of work that has been ordered  and funded by customers but not completed by Industrial Operations  at the end of the fiscal year. We found that the Army did not  adequately evaluate program needs and performance management  constraints or the budgetary impact of the implementation of its LMP  when budgeting for its Industrial Operations. As a result, unreliable  information on the scope of work and the lack of available parts  affected mission readiness. Further, the overstated Industrial  Operations carryover amounts resulted in unreliable estimates of  Operations and Maintenance funding levels. For example, the  Industrial Fund carryover amounts more than doubled from fiscal  years 2006 through 2012, exceeding budget estimates by more than  $1.1 billion each year. We made three recommendations aimed at  implementing the Army’s planned corrective actions to (1) establish a  timetable for implementing new policy guidance, (2) improve the  budgeting for new orders, and (3) establish procedures for evaluating  work orders received to ensure that resources are available to  perform the work. DOD agreed with our recommendations and has  actions planned or under way to address them.
The Office of Management and Budget (OMB) requires that federal  agency budget submissions reflect anticipated reductions in improper  payments in their PARs or agency financial reports (AFR) pursuant  to legal requirements for the estimation of improper payments. For  years, DOD has reported over $1 billion annually in improper  payments. Improper payments degrade the integrity of government  programs, compromise citizens’ trust in government, and drain  resources away from the missions and goals of the government. As  we reported in May 2013, although DOD has reported billions of  dollars in improper payments, it does not know the extent of its  improper payments because of flaws in its estimating methodology.  We found that DOD’s improper payment estimates reported in its  fiscal year 2011 AFR were neither reliable nor statistically valid  because of long-standing and pervasive financial management  weaknesses and significant deficiencies in the department’s  procedures to estimate improper payments. The flawed methodology  for estimating improper payments also limits the effectiveness of  DOD’s corrective actions. We recommended that DOD take steps to  (1) improve improper payment estimating procedures, such as  developing valid sampling methodologies and error projections; (2)  identify programs susceptible to improper payments and perform a  risk assessments; (3) develop and implement corrective action plans  in accordance with best practices; (4) implement recovery audits; and  (5) ensure the accuracy and completeness of improper payment and  recovery audit reporting. DOD agreed with our recommendations and  cited planned actions to address them.
section_title: Cost-effective Choices
paragraphs: Reliable information on the cost of operations is critical to provide  accountability for and to efficiently and economically manage DOD’s vast  resources. Reliable cost information is essential for making important  decisions, such as reallocating resources to fighting forces and  considering whether to continue, modify, or discontinue programs and  activities. However, DOD’s legacy financial management systems were  not designed to capture the full cost of its activities and programs, and  DOD’s enterprise resource planning (ERP) systems continue to  experience schedule slippages and cost overruns and are not estimated  to be fully implemented until the end of fiscal year 2016 or later.
As our prior work has found, to effectively, efficiently, and economically  manage DOD’s programs, its managers need reliable cost information for  (1) evaluating programs (for example, measuring actual results of  management’s actions against expected savings or determining the effect  of long-term liabilities created by current programs); (2) making cost- effective choices, such as whether to outsource specific activities and  how to improve efficiency through technology choices; and (3) controlling  costs for its weapon systems and business activities funded through  working capital funds. The lack of reliable, cost-based information has  hampered DOD in each of these areas, as described in the following  examples.
In a February 2014 report on our audit of the U.S. government’s  consolidated financial statements, we reported that DOD was  responsible for the majority of the federal government’s inventories  and property, plant, and equipment and that DOD did not maintain  adequate systems or have sufficient records to provide reliable  information on these assets. Further, deficiencies in internal control  over such assets could affect the federal government’s ability to fully  know the assets it owns, including their location and condition, and its  ability to (1) safeguard assets from physical deterioration, theft, or  loss; (2) account for acquisitions and disposals of such assets and  reliably report asset balances; (3) ensure that the assets are available  for use when needed; (4) prevent unnecessary storage and  maintenance costs or purchase of assets already on hand; and (5)  determine the full costs of programs that use these assets. DOD is  addressing these issues through implementation of its FIAR Plan.
With the nation facing fiscal challenges and the potential for tighter  defense budgets, the Congress and DOD have placed more attention  on controlling the billions of dollars spent annually on weapon system  operating and support costs, including costs for repair parts,  maintenance, and personnel, which account for 70 percent of the total  costs of a weapon system over its life cycle. The Selected Acquisition  Report (SAR) is DOD’s key recurring status report on the cost,  schedule, and performance of major defense acquisition programs  and is intended to provide authoritative information for congressional  oversight of these programs. Oversight of operating and support costs  is important because many of the key decisions affecting these life  cycle costs are made during the acquisition process. In February  2012, we reported that DOD’s reports to the Congress on estimated  weapon system operating and support costs are often inconsistent  and sometimes unreliable, limiting visibility needed for effective  oversight of these costs. To enhance the visibility of weapon system  costs during acquisition, we recommended that DOD improve its  guidance to program offices on cost reporting and also to improve its  process for reviewing these costs prior to final submission of the SAR  to the Congress. DOD concurred with our recommendations and  noted actions it was taking to address them. We are continuing to  monitor DOD’s progress in addressing our recommendations.
In December 2012, DOD canceled the Air Force’s Expeditionary  Combat Support System after having spent more than a billion dollars  and missing multiple milestones, including failure to achieve  deployment within 5 years of obligating funds. The system was to  provide the Air Force with a single, integrated logistics system that  was to control and account for about $36 billion of inventory. We  issued several reports on this system and found that among other  things, the program was not fully following best practices for  developing reliable schedules and cost estimates. We also reported  that independent Air Force technical evaluations identified operational  deficiencies that impaired the system’s efficiency and effectiveness in  accounting for business transactions and reporting reliable financial  information.
Accurate and complete cost information also is key to making  effective and economical investment decisions. We reported that one- time implementation costs for Base Realignment and Closure (BRAC)  2005 grew from $21 billion originally estimated by the BRAC  Commission in 2005 to about $35.1 billion, or by 67 percent, through  fiscal year 2011, primarily because of higher-than-anticipated military  construction costs. Military construction costs for the BRAC 2005  round increased from $13.2 billion based on original estimates by the  BRAC Commission to $24.5 billion, an 86 percent increase, through  fiscal year 2011, while over the same period, general inflation  increased by 13.7 percent. In certain cases, DOD did not include  some significant military construction requirements that were needed  to implement the recommendations as envisioned, resulting in the  identification of additional requirements and related cost increases  after the recommendations were approved by the BRAC Commission.  Consequently, the increase of $11.3 billion in military construction   costs drove about 80 percent of the total cost increases of $14.1  billion for BRAC 2005. Further, because some additional requirements  were driven by events after the BRAC Commission’s approval, the  Congress had limited visibility into the potential costs of the original  recommendations. Another reason we identified for the growth in  implementation costs over DOD’s initial BRAC estimates was that  DOD had difficulties accurately anticipating information technology  requirements for many recommendations, leading to significantly  understated information technology costs for some BRAC  recommendations—particularly those that involved missions with  considerable reliance on such capabilities. We made 10  recommendations for improving the BRAC process. DOD concurred  with 3 of our recommendations, partially concurred with 2, and did not  concur with 5 of them. In disagreeing with certain recommendations,  DOD expressed concern that our recommendations precluded  optimizing military value and stated that the current process was  sufficient to address our concerns. We continue to believe that  although DOD’s BRAC process was fundamentally sound, our  recommendations did not preclude opportunities for improvements or  the potential for cost savings.
section_title: Accountability over Use of Public Funds
paragraphs: We recently reported that our analysis of 333 reports related to DOD  funds control issued in fiscal years 2007 through 2013 identified over  1,000 funds control weaknesses related to (1) training, supervision, and  management oversight; (2) proper authorization, recording,  documentation, and reporting of transactions; and (3) business system  compliance with federal laws and accounting standards. We found that  these weaknesses led DOD to make program and operational decisions  based on unreliable data and impaired DOD’s ability to improve its  financial management. Specifically, fundamental weaknesses in funds  control significantly impaired DOD’s ability to (1) properly use resources,  (2) produce reliable financial reports on the results of operations, and (3)  meet its audit readiness goals as discussed in the following examples.
Continuing reports of violations of the Antideficiency Act (ADA) and  other fiscal laws, such as the Purpose Statute, underscore DOD’s  inability to assure that obligations and expenditures are properly  recorded and do not exceed statutory levels of control. The ADA  requires, among other things, that no officer or employee of DOD  incur obligations or make expenditures in excess of the amounts  made available by appropriation, by apportionment, or by further  subdivision according to the agency’s funds control regulations.  According to copies of ADA violation reports we reviewed, DOD  reported 75 ADA violations from fiscal year 2007 through fiscal year  2012, totaling nearly $1.1 billion. We received reports of 2 additional  ADA violations in 2013 totaling $148.6 million. However, we  determined that the number of violations and dollar amounts reported  may not be complete because of weaknesses in DOD’s funds control  and monitoring processes that may not have allowed all violations to  be identified or reported. For example, DOD IG reports issued in fiscal  years 2007 through 2012 identified $5.5 billion in potential ADA  violations that required further investigation to determine whether an  ADA violation had, in fact, occurred, or if adjustments could be made  to avoid a violation. Further, while DOD’s Financial Management  Regulation (FMR) limits the time from identification to reporting of  ADA violations to 15 months, our analysis identified several  examples of time spans for investigations of potential ADA violations  taking several additional months to several years before  determinations of actual violations were reported. For example, as of  September 30, 2013, three of the DOD IG-reported potential violations  totaling $713.1 million could not be fully corrected and, consequently,  resulted in $108.8 million in actual, reported ADA violations. To the  extent that ADA violations are not identified, corrected, and reported,  DOD management decisions are being made based on incomplete  and unreliable data.
DOD has stated that its major financial decisions are based on  budgetary data (e.g., the status of funds received, obligated, and  expended). We have found that the department’s ability to improve its  budgetary accounting has historically been hindered by its reliance on  fundamentally flawed financial management systems and processes  and transaction control weaknesses. In its November 2013 AFR,  DOD self-reported 16 material weaknesses in financial reporting,  noting that it has no assurance of the effectiveness of the related  controls. These weaknesses affect reporting on budgetary  transactions and balances, including budget authority, fund balance,  outlays, and categories of transactions, such as civilian pay, military  pay, and contract payments. As a result, we have concluded that  DOD’s reports on budget execution and reports on the results of  operations that could have a material effect on budget, spending, and  other management decisions are unreliable.
For example, we found that DOD continues to make billions of dollars  of unsupported, forced adjustments, or “plugs,” to reconcile its Fund  Balance with Treasury (FBWT). In the federal government, an  agency’s FBWT accounts are similar in concept to corporate bank  accounts. The difference is that instead of a cash balance, FBWT  represents unexpended budget authority in appropriation accounts.  Similar to bank accounts, the funds in DOD’s appropriation accounts  must be reduced or increased as the department spends money or  receives collections that it is authorized to retain for its own use. For  fiscal year 2012, DOD agencies reported making $9.2 billion in  unsupported reconciling adjustments to agree their fund balances with  the Department of the Treasury’s (Treasury) records. DOD’s  unsupported reconciling adjustments to agree its fund balances to  Treasury records grew to $9.6 billion in fiscal year 2013. We  recommended that the Navy develop and implement standard  operating procedures for performing FBWT reconciliations with  Treasury records and that it provide training on the new procedures to  personnel performing FBWT reconciliations. The Navy has actions  under way to address our recommendations.
Further, we have reported that over the years, DOD has recorded  billions of dollars of disbursement and collection transactions in  suspense accounts because the proper appropriation accounts could  not be identified and charged, generally because of coding errors.  Accordingly, Treasury does not accept DOD reporting of suspense  transactions, and suspense transactions are not included in DOD  component FBWT reconciliations. We have concluded that it is  important that DOD accurately and promptly charge transactions to  appropriation accounts since these accounts provide the department  with legal authority to incur and pay obligations for goods and  services. We recommended that the Navy perform periodic testing of  systems for reporting transactions to Treasury and prioritize and  address identified deficiencies. The Navy agreed with our  recommendations and has actions under way to address them. We  are monitoring the Navy’s progress.
While DOD has actions under way to address its department-wide funds  control weaknesses, several are not expected to be completed until 2017.  Until fully resolved, these weaknesses will continue to adversely affect  DOD’s ability to achieve its goals for financial accountability, including the  ability to produce consistent, reliable, and sustainable financial  information for day-to-day decision making. Sustained leadership  commitment will be critical to achieving success. In commenting on our  most recent report released this week, DOD stated that while our report  recommended no new actions based on the numerous actions that DOD  already has under way, the department’s commitment to building a  stronger business environment via its people, processes, and systems  remains paramount.
section_title: DOD’s Actions to Improve Financial Management and Achieve Audit Readiness, and Remaining Challenges
subsections: section_title: FIAR Plan Implementation
paragraphs: In 2005, the Under Secretary of Defense Comptroller/CFO (DOD  Comptroller) established the FIAR Directorate, consisting of the FIAR  Director and his staff, to develop, manage, and implement a strategic  approach for addressing financial management deficiencies, achieving  audit readiness, and integrating those efforts with other initiatives. 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. In August 2009, the DOD Comptroller sought to focus  FIAR efforts by giving priority to improving processes and controls that  support the financial information most often used to manage the  department. Accordingly, the DOD Comptroller revised the FIAR Plan  strategy to focus on two priorities—budgetary information and asset  accountability. The first priority was to strengthen processes, controls,  and systems that produce DOD’s budgetary information. The second  priority was to improve the accuracy and reliability of management  information pertaining to the department’s mission-critical assets,  including military equipment, real property, and general equipment. In  May 2010, the DOD Comptroller first issued the FIAR Guidance, which  provided the standard methodology for the components to implement the  FIAR Plan. According to DOD, the components’ successful  implementation of this methodology is essential to the department’s ability  to achieve full financial statement auditability.
In October 2011, the Secretary of Defense directed the department to  achieve audit readiness for its SBR for general fund accounts by the end  of fiscal year 2014, and the NDAA for Fiscal Year 2012 required that the  next FIAR Plan update include a plan to support this goal. Further, the  NDAA for Fiscal Year 2013 made the 2014 target for SBR auditability an  ongoing component of the FIAR Plan by amending the NDAA for Fiscal  Year 2010 such that it now explicitly refers to describing the actions and  costs associated with validating as audit ready both DOD’s SBR by the  end of fiscal year 2014 and DOD’s complete set of financial statements  by the end of fiscal year 2017.
In response to component difficulties in preparing for a full SBR audit, the  November 2012 FIAR Plan Status Report and the March 2013 FIAR  Guidance included a revision to narrow the scope of initial audits to only  current-year budget activity and expenditures on a Schedule of Budgetary  Activity. Under this approach, beginning in fiscal year 2015, reporting  entities are to undergo an examination of their Schedules of Budgetary  Activity reflecting the amount of SBR balances and associated activity  related only to funding approved on or after October 1, 2014. As a result,  the Schedules of Budgetary Activity will exclude unobligated and  unexpended amounts carried over from prior years’ funding as well as  information on the status and use of such funding in subsequent years  (e.g., obligations incurred and outlays). These amounts will remain  unaudited. Over the ensuing years, as the unaudited portion of SBR  balances and activity related to this funding decline, the audited portion is  expected to increase. However, the NDAA for Fiscal Year 2010, as  amended by the NDAA for Fiscal Year 2013, requires that the FIAR Plan  describe specific actions to be taken and the costs associated with  ensuring that DOD’s SBR is validated as ready for audit by not later than  September 30, 2014. We have reported that because the audit of the  Schedule of Budgetary Activity is an incremental step building toward an  audit-ready SBR, the FIAR Plan does not presently comply with this  requirement. Furthermore, all material amounts reported on the SBR will  need to be auditable in order to achieve the mandated goal of full  financial statement audit readiness by September 30, 2017. It is not clear  how this can be accomplished if activity related to funding provided prior  to October 1, 2014, remains unaudited.
DOD defines an assessable unit as any part of the financial statements, such as a line  item or a class of assets, a class of transactions, or a process or a system, that helps  produce the financial statements. generally accepted accounting principles. We found that while DOD has  made progress toward financial audit readiness, according to DOD’s  November 2013 FIAR Plan Status Report, milestone dates for the Navy  have slipped and SBR milestone dates for the Army and defense  agencies have been compressed, making it questionable whether  corrective actions for these DOD components will be completed by  September 2014 for all assessable units. Further, the Air Force has  revised its milestone dates for achieving SBR audit readiness to the third  quarter of fiscal year 2015. With a reported $187.8 billion in fiscal year  2013 General Fund budgetary resources, the Air Force is material to  DOD’s SBR, and if the Air Force cannot meet DOD’s September 2014  SBR audit readiness goal, DOD will not be able to meet its goal. This in  turn raises substantial concerns about DOD’s ability to undergo an audit  on a full set of financial statements for fiscal year 2018.
In addition, our recent reports have identified several major challenges to  DOD’s ability to successfully implement the FIAR Plan and meet its audit  readiness goals. The following discussion summarizes these challenges.
Process for identifying and mitigating risks to the FIAR effort. In  August 2013, we reported that DOD’s FIAR effort would benefit from a  risk management strategy to help program managers and stakeholders  make decisions about assessing risk, allocating resources, and taking  actions under conditions of uncertainty.six department-wide risks to the FIAR Plan’s implementation: (1) lack of  DOD-wide commitment, (2) insufficient accountability, (3) poorly defined  scope and requirements, (4) unqualified or inexperienced personnel, (5)  insufficient funding, and (6) information systems control weaknesses.  DOD officials stated that risks are discussed on an ongoing basis during  various FIAR oversight committee meetings; however, the risks DOD  initially identified were not comprehensive, and DOD provided no  evidence of efforts to identify additional risks. Further, we found little  evidence that DOD analyzed risks it identified to assess their magnitude  or that DOD developed adequate plans for mitigating the risks. DOD’s risk  mitigation plans, published in its FIAR Plan Status Reports, consisted of  brief, high-level summaries that did not include critical management  information, such as specific and detailed plans for implementation,   In January 2012, DOD identified  assignment of responsibility, milestones, or resource needs. In addition,  information about DOD’s mitigation efforts was not sufficient for DOD to  monitor the extent of progress in mitigating identified risks. We concluded  that without effective risk management at the department-wide level to  help ensure the success of the FIAR Plan implementation, DOD is at  increased risk of not achieving its audit readiness goals. We  recommended that the department design and implement department- level policies and detailed procedures for FIAR Plan risk management  that incorporate the five guiding principles for effective risk management.  DOD acknowledged that it does not have a risk management program  that is specifically related to its FIAR effort and cited planned actions that  if effectively and efficiently implemented, would address some aspects of  the five guiding principles of risk management that are the basis for our  recommendations. We are continuing to monitor DOD’s actions on our  recommendation.
Component implementation of the FIAR Guidance. The FIAR  Guidance provides a methodology for DOD components to use in  developing and implementing their Financial Improvement Plans (FIP).  The guidance details the roles and responsibilities of the DOD  components, and prescribes a standard, systematic process for  assessing processes, controls, and systems. DOD’s ability to achieve  department-wide audit readiness greatly depends on its military  components’ ability to effectively develop and implement FIPs in  compliance with the FIAR Guidance. However, we have reported on  concerns with the department’s efforts to implement this methodology.  For example, our review of the Navy’s civilian pay and Air Force’s military  equipment audit readiness efforts identified significant deficiencies in the  components’ execution of the FIAR Guidance, resulting in insufficient  testing and unsupported conclusions. We recommended that DOD take  various actions to improve the development, implementation,  documentation, and oversight of DOD’s financial management  improvement efforts. DOD generally concurred with recommendations  and noted actions being taken to implement them. We are continuing to  monitor Navy and Air Force audit readiness actions.
In reviews of other DOD components, we also found internal control  weaknesses in DOD’s procedures for maintaining accountability for  billions of dollars in funds and other resources. For example, the Army  and DFAS could not readily identify the full population of payroll accounts  associated with the Army’s $46 billion active duty military payroll because  of deficiencies in existing procedures and nonintegrated personnel and  payroll systems. We recommended that the Army identify documents  needed to support military payroll transactions affecting the pay of  millions of active duty Army military personnel and that it develop and  implement procedures for maintaining those documents. As a first step,  the Army has developed a matrix of supporting documents for its military  pay. However, the Army has not yet completed action to populate a  central repository with these records.
Preliminary results from our ongoing work to assess the Army’s progress  in implementing its FIP for budget execution to help guide its SBR  readiness efforts indicate that the Army did not fully complete certain  tasks in accordance with the FIAR Guidance to ensure that its FIP  adequately considered the scope of efforts required for audit readiness.  For example, the Army did not consider the risks associated with  excluding prior year balances and current year activity associated with  legacy systems and did not adequately identify significant SBR activity  attributable to service-provider business processes and systems or obtain  sufficient information to assess their audit readiness. These activities may  continue to represent material portions of future SBRs, which if not  auditable, will likely affect the Army’s ability to achieve audit readiness  goals as planned. Our review of the Army’s monthly tests to assess the  effectiveness of selected budget execution controls show that the Army  identified extensive deficiencies, such as a lack of appropriate reviews or  approvals, and had an average failure rate of 56 percent for control tests  from June 2012 through May 2013, the period covered by our review.  Further, the Army’s corrective actions were not linked to specific  corrective action plans to address the causes of identified deficiencies.  The deficiencies and gaps we have identified in our preliminary findings  throughout various phases of the Army’s SBR audit readiness efforts  demonstrate a focus on meeting scheduled milestone dates and asserting  audit readiness instead of completing actions to resolve extensive control  deficiencies.
Further, the military services rely heavily on DOD’s internal service  providers to perform a variety of accounting, personnel, logistics, and  system operations. For example, DFAS performs accounting and  disbursement functions for the military services and defense agencies.  The FIAR Guidance requires the service providers to have their control  activities and supporting documentation examined by the DOD IG or an  independent auditor in accordance with Statement on Standards for  Attestation Engagements (SSAE) No.16 so that components have a basis  for relying on the service provider’s data for their financial statement  audits. In August 2013, we reported that DOD did not have an effective  process for identifying audit-readiness risks, including risks associated  with its reliance on service providers for much of its components’ financial  data, and it needed better department-wide documentation retention  policies. We identified two DOD component agencies—the Navy and  the Defense Logistics Agency (DLA)—that had established practices  consistent with risk management guiding principles. Because effective  service-provider controls are critical to ensuring improvements in DOD  funds control, we recommended that DOD consider and incorporate, as  appropriate, Navy and DLA practices in department-level policies and  procedures. DOD agreed with our recommendation and is taking actions  to address it.
DOD has identified contract pay as a key element of its SBR. DFAS, the  service provider responsible for disbursing nearly $200 billion annually in  the department’s contract pay, has asserted that its processes, systems,  and controls over contract pay are suitably designed and operating  effectively to undergo an audit. Preliminary results from our ongoing  assessment of DFAS’s implementation of its FIP for contract pay audit  readiness indicate that DFAS has numerous deficiencies that have not  yet been remediated. For example, DFAS did not adequately perform  certain planning activities, such as assessing dollar activity and risk  factors of its processes, systems, and controls, which resulted in the  exclusion of three key processes from the FIP, such as the reconciliation  of its contract pay data to components’ general ledgers. As a result,  DFAS did not obtain sufficient assurance that the contract disbursements  it processed were accurately recorded and maintained in the components’  general ledgers and that the status of DOD’s contract obligations was up- to-date. Although DFAS has asserted audit readiness for contract pay,  until it corrects the weaknesses we identified, its ability to process, record,  and maintain accurate and reliable contract pay transaction data is  questionable. Therefore, our preliminary results indicate that DFAS does  not have assurance that its FIP will satisfy the needs of DOD components  or provide the expected benefits to department-wide efforts to assert audit  readiness for contract pay as a key element of the SBR.
section_title: Modern Business Information Systems
paragraphs: In May 2014, we reported that DOD continued efforts to improve its  business enterprise architecture (BEA)—a modernization blueprint—and  transition plan and modernize its business systems and processes,  consistent with key statutory provisions. However, we found that even  though DOD has spent more than 10 years and at least $379 million on  the architecture, DOD has not yet demonstrated that the BEA has  produced business value for the department. For example, while DOD  has established a tool that can assist in identifying potential duplication  and overlap among business systems, the department has not  demonstrated that it has used this information to reduce duplication and  overlap. Accordingly, we recommended that the department develop  guidance requiring military departments and other defense organizations  to use existing BEA content to more proactively identify potential  duplication and overlap. DOD agreed with our recommendation.  Collectively, the limitations described in our May 2014 report put the  billions of dollars spent annually on approximately 2,100 business system  investments that support DOD functions at risk.
Further, DOD has identified several, multifunctional ERP systems as  critical to its financial management improvement efforts. In a 2012 report  on four of these ERPs, we found deficiencies in areas such as data  quality, data conversion, system interfaces, and training that affect their  capability to perform essential business functions. DFAS personnel also  reported difficulty in using the systems to perform day-to-day activities.  We recommended that DOD ensure that (1) any future system  deficiencies identified through independent assessments are resolved or  mitigated prior to further deployment of the systems, (2) timelines are  established and monitored for those issues identified by DFAS that are  affecting their efficient and effective use, and (3) training on actual job  processes are provided in a manner that allows users to understand how  the new processes support their job responsibilities and the work they are  expected to perform.recommendation, stating that based on the nature of an identified system  deficiency, it will determine whether to defer system implementation until  it is corrected. DOD agreed with our recommendations to establish and  monitor timelines and provide training on user roles and responsibilities.  We are continuing to monitor DOD’s actions.
DOD partially concurred with our first  If these business systems do not provide the intended capabilities on  schedule, DOD’s goal of establishing effective financial management  operations and becoming audit ready could be jeopardized. We recently  reported that the Air Force did not meet best practices in developing a  schedule for the Defense Enterprise Accounting and Management  System (DEAMS) program. We believe that this raises questions about the credibility of the deadline for acquiring and implementing DEAMS to  provide needed functionality for financial improvement and audit  readiness. We recommended that the Air Force update the cost estimate  as necessary after implementing our prior recommendation to adopt  scheduling best practices. DOD concurred with our recommendation.
section_title: Competent Financial Management Workforce
paragraphs: A key principle for effective workforce planning is that an agency needs to  define the critical skills and competencies that it will require in the future  to meet its strategic program goals. Once an agency has identified critical  skills and competencies, it can develop strategies to address gaps in the  number of personnel, needed skills and competencies, and deployment of  the workforce.
In April 2014, we reported that DOD is addressing financial  management workforce competencies and training through  complementary efforts by (1) the Office of the Under Secretary of  Defense for Personnel and Readiness (Personnel and Readiness) to  develop a strategic civilian workforce plan that includes financial  management, pursuant to requirements in the NDAA for Fiscal Year  2010, as amended, and (2) the DOD Comptroller to develop and  implement a Financial Management Certification Program, pursuant to  requirements in the NDAA for Fiscal Year 2012. Financial management  personnel are expected to possess the competencies that are relevant to  and needed for their assigned positions. These competencies include  fundamentals of accounting, accounting analysis, budget execution,  financial reporting, and audit planning and management, among others.  Personnel and Readiness is currently working on a competency  assessment tool that will be used by the department, including the  financial management functional community. The tool is to capture  information related to competencies, such as proficiency level,  importance, and criticality, and to identify any gaps in support of the  Comptroller’s Financial Management Certification Program. Phased  implementation of the program began in June 2013, and the current  target date for full implementation is the end of fiscal year 2014. The  certification program is to be mandatory for DOD’s approximately 54,000  civilian and military financial management personnel and may take up to  2 years to complete, depending on the extent to which an individual’s  prior course work and level of experience to meet the new certification  requirements. In April 14, 2014, the Deputy CFO stated that the newly  implemented Financial Management Certification Program has already  enrolled 22,300 financial managers and certified over 30.
Without a competent workforce and effective implementation of financial  management processes, systems, and controls, DOD and its components  are at risk that DOD’s other financial management reform activities will  not be successful, resulting in incomplete and unreliable data for decision  making. To the extent that these challenges are not addressed, DOD  financial management will continue to be at high risk for waste, fraud,  abuse, and mismanagement.
In conclusion, while DOD has several financial management improvement  efforts under way and is monitoring progress against milestones, as the  dates for validating audit readiness approach, DOD has emphasized  asserting audit readiness by a certain date over making sure that effective  processes, systems, and controls are in place to ensure that its  components have improved financial management information for day-to- day decision making. However, several significant factors—including  DOD component milestone slippages in meeting audit readiness dates;  continuing, uncorrected DOD-wide financial management weaknesses;  and inadequate risk management efforts—make it increasingly unlikely  that DOD’s SBR will be audit ready by September 2014. While  establishing and working toward milestones are important to measure  progress, DOD should not lose sight of the ultimate goal of implementing  lasting financial management reform to ensure that it has the systems,  processes, and personnel to routinely generate reliable financial  management and other information critical to decision making and  effective operations for achieving its missions. Overcoming DOD’s long- standing financial management challenges will require strong  commitment and top leadership support.
Chairman Carper, Ranking Member Coburn, and Members of the  Committee, this completes my prepared statement. I would be pleased to  respond to any questions that you may have at this time.
section_title: GAO Contacts and Staff Acknowledgments
paragraphs: 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 members who made key  contributions to this testimony include Gayle L. Fischer (Assistant  Director), Gregory Marchand (Assistant General Counsel), Arkelga  Braxton, Michael Bingham, Francine DelVecchio, Jason Kirwan, Susan  Mata, Sheila D. M. Miller, Roger Stoltz, and Heather Rasmussen.
section_title: Related GAO Products
paragraphs: Defense Business Systems: Further Refinements Needed to Guide the  Investment Management Process. GAO-14-486. Washington, D.C.: May  12, 2014.
DOD Financial Management: Actions Under Way Need to Be  Successfully Completed to Address Long-standing Funds Control  Weaknesses. GAO-14-94. Washington, D.C.: April 29, 2014.
Defense Logistics: Army Should Track Financial Benefits Realized from  its Logistics Modernization Program. GAO-14-51. Washington, D.C.:  November 13, 2013.
DOD Financial Management: Ineffective Risk Management Could Impair  Progress toward Audit-Ready Financial Statements. GAO-13-123.  Washington, D.C.: August 2, 2013.
Information Technology: OMB and Agencies Need to More Effectively  Implement Major Initiatives to Save Billions of Dollars. GAO-13-796T.  Washington, D.C.: July 25, 2013.
Army Industrial Operations: Budgeting and Management of Carryover  Could Be Improved. GAO-13-499. Washington, D.C.: June 27, 2013.
DOD Financial Management: Significant Improvements Needed in Efforts  to Address Improper Payment Requirements. GAO-13-227. Washington,  D.C.: May 13, 2013.
Major Automated Information Systems: Selected Defense Programs  Need to Implement Key Acquisition Practices. GAO-13-311. Washington,  D.C.: March 28, 2013.
Military Bases: Opportunities Exist to Improve Future Base Realignment  and Closure Rounds. GAO-13-149. Washington, D.C.: March 7, 2013.
Defense Logistics: A Completed Comprehensive Strategy is Needed to  Guide DOD’s In-Transit Visibility Efforts. GAO-13-201. Washington, D.C.:  February 28, 2013.
High-Risk Series: An Update. GAO-13-283. Washington, D.C.: February  2013.
Defense Logistics: DOD Has Taken Actions to Improve Some Segments  of the Materiel Distribution System. GAO-12-883R. Washington, D.C.:  August 3, 2012.
Military Base Realignments and Closures: Updated Costs and Savings  Estimates from BRAC 2005. GAO-12-709R. Washington, D.C.: June 29,  2012.
Defense Inventory: Actions Underway to Implement Improvement Plan,  but Steps Needed to Enhance Efforts. GAO-12-493. Washington, D.C.:  May 3, 2012.
Defense Logistics: Improvements Needed to Enhance DOD’s  Management and Approach and Implementation of Item Unique  Identification Technology. GAO-12-482. Washington, D.C.: May 3, 2012.
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