DOD business modernization efforts continue to fall short

It’s been an uphill battle to modernize the Defense Department’s endemic financial bookkeeping struggles, and it looks like the struggle is still underway, according to a new Government Accountability Office report.

Poor governance, implementation failures and inadequate inventory and manpower are among the chief reasons DOD has made limited progress in modernizing its incongruent and archaic business systems, the report said.

“Since 1995, GAO has designated DOD’s business systems modernization program as high risk, and it continues to do so today,” GAO reported. “While the department has initiated numerous activities aimed at addressing [business modernization mandates], it has been limited in its ability to demonstrate results.”

Since 2005, DOD has been required by that year’s that fiscal year’s National Defense Authorization Act to problems in DOD’s business systems and report annually to Congress on progress. Each year GAO has also reviewed the progress and made recommendations – some of which have been put in place, and some that continue to trouble the department.

For example, DOD has not implemented guidelines from GAO’s IT investment management framework since the auditor last reviewed the department in 2011, and hasn’t measured or reported results from a GAO-recommended review process.

In addition, DOD continues to describe ongoing certification plans and actions for updating business systems – $2.2 billion worth in modernization spending – but GAO stated that bases and approvals for the actions is supported only by limited information.

Perhaps one of the biggest problems faced by the Deputy Chief Management Office, tasked with the modernization efforts, is a dearth of manpower.

According to the report, the DCMO “lacks the full complement of staff it identified as needed to perform business systems modernization responsibilities” – including 41 percent of its positions remaining unfilled.

DOD officials, including Deputy Chief Management Officer Elizabeth McGrath, have defended their efforts and stipulated that progress has been made, including at an April hearing before Congress.

“Achieving this important objective at DOD is no routine task. It requires an enterprise-wide response and an effective strategy,” McGrath said in a testimony before the Senate Armed Services Committee. “Over the past year the department has taken a number of steps to improve its overarching business environment … [we have] continued to mature business transformation-related processes, architectural framework and governance that support our transition to a more modern and disciplined business environment.”