DOD OIG: Audit of DOD’s plans to Address Longstanding Issues with Outdated Financial Management Systems

The objective of this audit was to determine the completeness and accuracy of the DoD’s list of systems that are relevant to internal controls over financial reporting (ICOFR) and assess the DoD’s plans to replace noncompliant financial management systems with systems that meet the requirements of the Federal Financial Management Improvement Act of 1996 (FFMIA).

We made 31 recommendations to address the findings of this report.  Among other recommendations, we recommend that the Deputy Secretary of Defense direct the Under Secretary of Defense (Comptroller)/Chief Financial Officer, DoD, and the DoD Chief Information Officer to identify a lead and the lead subsequently develops and implements a plan to:

• (U) create an ideal end-state document that identifies the financial management systems that the DoD will have when it achieves compliance with the FFMIA,
• (U) create a strategy for all DoD financial management systems to become FFMIA compliant or retire and replace in a timely manner,
• (U) obtain justification from the system owners for the continued use of each system in the Defense Business System Audit Remediation Plan, and
• (U) identify significant challenges preventing the DoD Components from simplifying the DoD system environment and implement DoD-wide solutions to address any identified challenges. (U) We also recommend that the:
• (U) Deputy Secretary of Defense approve the continued use of each system in the Defense Business System Audit Remediation Plan and
• (U) Under Secretary of Defense (Comptroller)/ Chief Financial Officer, DoD, reevaluate the DoD’s timeline for modernizing the DoD’s financial systems in an effort to expedite the remediation of the DoD’s noncompliance with the FFMIA…

See the complete report here.

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