DOD keeps pace for fast-track financial fix

Defense Department officials hope to complete a draft of their financial management architecture within three months, according to sources working on the project.

The architecture is part of DOD's effort to clean up a long-standing financial mess. But the DOD inspector general and auditors from the General Accounting Office have said that the architecture is a critical first step toward streamlining DOD's complex matrix of more than 1,000 financial management systems.

In April, DOD awarded a contract valued at $100 million to IBM Corp. to develop the architecture.

Initial efforts have focused on DOD business practices and policies rather than on technology, said Betty Sandbeck, IBM's DOD financial management architecture project manager.

DOD has designated 76 people representing the department's business lines to advise the IBM team on the architecture's development, Sandbeck said. The DOD team will advise the development team about changes that must be made to comply with legislative requirements, as well as the feasibility of proposed changes to business practices.

Once a draft architecture is approved, it will be deployed throughout DOD, she said.

Although DOD awarded the contract to IBM, the pieces are being doled out as individual task orders under the contract. Tom Burlin, vice president of IBM Global Services' public-sector unit, said that DOD had awarded three task orders so far: one to establish the program office, one to look at DOD's "as is" environment and one to create a repository for the information that the project creates.

The initial stages of such an undertaking are critical, and Burlin said that they have gone very well.

DOD set an aggressive one-year timetable for completing the architecture, which is still feasible, Burlin said.

Because of its size, DOD is widely blamed for preventing the government from being able to balance its books.

Bill Lynn, former DOD comptroller, praised Defense Secretary Donald Rumsfeld for making financial management a priority for the management information that it can provide. Although the private sector needs clean books to determine if a company is making money, public-sector organizations have no such impetus.

Instead, an agency's primary interest should be in providing good data to its managers, Lynn said.

Although Pentagon officials have come under intense criticism for their apparent inability to follow standard accounting practices, Lynn noted that DOD has only been required to follow such requirements for about 10 years. Previously, DOD's systems were designed to track money spent by congressional appropriations.

Furthermore, Lynn noted, DOD is more complex and diverse then any private-sector organization, making the work even more difficult.

Burlin and Lynn spoke at a forum on Capitol Hill sponsored by Fleishman-Hillard.

The goal is to provide decision- makers with the accurate, reliable and timely financial data necessary to make decisions, DOD officials have said.