GAO finds sloppy accounting for military IT

GAO Report: Improvements needed in the reliability of Defense budget submissions

The Defense Department needs better policies and procedures to produce transparent accounting of its information technology budget requests and expenditures, according to a General Accounting Office report released today.

The report said DOD's IT budget submission for the 2004 fiscal year contains "material inconsistencies, inaccuracies or omissions that limit its reliability." GAO officials found that discrepancies between the Defense IT budget summary report and the department's detailed Capital Investment Reports on each IT initiative total about $1.6 billion out of a $28 billion budget request.

Examples of major initiatives included in the 2004 budget submission include:

* Global Command and Control System -- a joint program intended to provide the information resources needed by warfighters to accomplish their command and control missions.

* Defense Information System Network -- a communications infrastructure initiative that is intended to connect DOD's mission support and armed forces using a combination of government and private infrastructure.

*Defense Integrated Military Human Resources System -- a military personnel and pay system that is expected to integrate personnel and pay functions for all military services.

"Major initiatives do not consistently use the same type of appropriations to fund the same activities," the report said. "That is, to fund the same types of activities, some DOD organizations used the research, development, test and evaluation appropriations and others used the operation and maintenance appropriations."

The IT budget summary used by DOD doesn't include all of the costs of the IT initiatives, which is contrary to federal guidance.

"These problems are largely attributable to insufficient management attention and limitations in departmental policies and procedures, such as guidance in DOD's financial Management Regulation, and to shortcomings in systems that support budget-related activities," the report said.

The result of the inconsistencies is that the Office of Management and Budget and Congress are forced to make IT funding decisions based on information whose reliability is limited.

About 95 percent of Navy's total dollar difference can be attributed to the Navy Marine Corps Intranet program, the report said.

"To improve the consistency, accuracy, and completeness of future DOD IT budget submissions, we recommend that the Secretary of Defense direct [his office] and component chief information officers... to increase management attention and establish the appropriate management controls and supporting systems to avoid the weaknesses described in this report," the GAO report said.

Defense officials did not provide a written reply to the report, but GAO officials said the military provided "official oral comments" in which the department agreed or partially agreed with GAO's recommendations.

The Defense Department's planned actions include:

* Negotiating with OMB a later submission date for DOD's exhibits, to provide additional time to ensure that exhibits are reliable.

* Working with OMB to ensure the use of consistent definitions and terminology for development and modernization and current services.

* Assessing, on a departmentwide basis, the establishment of a cost accounting system.

* Evaluating approaches to reduce or eliminate duplicative data entry; and

* Considering appropriations realignments during the fiscal year 2006 budget cycle.