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Pentagon on track to meet 2017 deadline for full audit, experts say

Jan. 24, 2012 - 06:00AM   |  
By SEAN REILLY   |   Comments
Defense Department Comptroller Robert Hale said the Pentagon has to make financial management "a commander's issue," instead of solely "a comptroller's issue."
Defense Department Comptroller Robert Hale said the Pentagon has to make financial management "a commander's issue," instead of solely "a comptroller's issue." (Molly A. Burgess / U.S. Navy)

Experts said the Defense Department will be ready for a full financial audit by a 2017 deadline, but only if it can get the sustained leadership the initiative needs.

"I'm confident that they are on that path," Rep. Michael Conaway, R-Texas, told fellow lawmakers at a Tuesday hearing of the House Armed Services Committee. Conaway headed an ad hoc panel charged last year by committee leaders with conducting a comprehensive review of the Pentagon's financial management system. "Leadership's job is to keep them on that path," he added.

In a report released at the hearing, the panel called the Pentagon's auditability strategy "reasonable," but voiced concern that some DoD agencies may not be effectively implementing it.

The Navy, for example, claimed audit readiness for civilian pay almost two years ago, but will need to do so again because of "additional corrective actions" required after its first try, the report said.

The review also singled out more than a half-dozen management and organizational challenges that need addressing. They include:

Sustained leadership to ensure the department meets the goal.

Training a competent financial management workforce.

Fully identifying improper payments. While the Defense Department reported $1 billion in improper payments in fiscal 2010, both the Government Accountability Office and DoD inspector general believe that figure may be low.

Implementation of enterprise resource planning systems to integrate accounting, logistics and other business functions.

Defense Department Comptroller Robert Hale generally did not contest the panel's findings. He added that the Pentagon has to make financial management "a commander's issue," instead of solely "a comptroller's issue."

"I think that's starting to happen, but we haven't gotten there yet," Hale said.

Congress could help by returning to "a more orderly budget process," he added. Repeated threats of a government shutdown in the last year required "enormous planning efforts," he said, while the Defense Department is now facing the threat of across-the-board budget cuts starting next year. The accompanying uncertainty, he continued, "has drained valuable time and leadership attention from many initiatives."

Defense Secretary Leon Panetta has set a goal to complete a budget audit one of four steps to completing the full financial audit by 2014.

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