New cash for old problems

The Defense Department has decided to begin mending its badly broken financial management systems and has allocated $100 million of its $330 billion fiscal 2002 budget request to overhaul one of its top information technology problems.

The military's financial systems support about 500 bases in 137 countries and territories and disburse about $24 billion in monthly payments, according to a General Accounting Office report. But those systems are flawed with decades-old problems, do not comply with federal requirements and were not designed to collect data that meets accepted accounting principles, the report concluded.

Fixing those systems is a top priority, in part because some key lawmakers are balking at approving overall DOD budget increases until they can trust the department's accounting.

Although he would probably approve a requested $18 billion overall increase for DOD's fiscal 2002 budget, Rep. Curt Weldon (R-Pa.) said during a House Armed Services Committee hearing June 28 that fixing the financial accounting systems has to be "the No. 1 priority."

Defense Secretary Donald Rumsfeld agreed. "The best estimates are that it will take years to refashion the financial management systems so that they function in a way that managers can in a reasonable period of time have any sense of how the money is flowing through that institution," Rumsfeld told lawmakers. "We've got to get them fixed."

Dov Zakheim, the Defense comptroller, said June 27 that the systems cannot be fixed in a year, but added, "That's $100 million. That's not trivial."

Paul Brubaker, former DOD deputy chief information officer, said $100 million is "probably the right number," but he warned that it should be spent wisely. "They need to determine what would make the perfect financial management system and then build a new one from scratch. They need a financial system that produces meaningful data, and the systems they have now don't even come close."

The extra $18 billion sought over the initial budget released in March represents the larg.est increase to DOD's budget since the mid-1960s, according to Defense officials. But it still leaves the military's efforts to transform to a "future force" mostly on hold for another year. The primary goal is to address concerns that Rumsfeld and others say have been neglected over the past decade, such as pay raises for military personnel, upgrades to military living quarters and increased funding for health care.