The Defense Department plans to spend nearly a billion dollars through fiscal 2014 on its effort to attain a clean financial audit by the end of fiscal 2017, according to a Pentagon comptroller report.

That billion-dollar figure excludes money also being spent on 10 major enterprise resource planning systems, on which Defense will spend at least $12.7 billion to implement, according to DoD and Government Accountability Office figures.

More precisely, the DoD comptroller anticipates that his office, the military services and the Defense Logistics Agency will collectively spend at least $948 million through fiscal 2014 on the department's financial improvement and audit readiness (FIAR) effort, which seeks to rationalize financial reporting and management within the DoD. Click here for a table with spending broken down by component and fiscal year.

The figure comes from a May 2010 status report by the comptroller that also says a lack of resources "has been a serious impediment to FIAR progress except in the Navy and DLA." The Army and Air Force have increased funding for FIAR efforts, the report adds.

The report also says that financial management auditing standards might change to eliminate the historic cost data requirement. The Chief Financial Officers Council, the Office of Management and Budget and the Federal Accounting Standards Advisory Board are considering changes that would modify what the report calls "requirements of limited value or return to federal agencies."

Work on determining the historical cost of existing Defense assets "has been temporarily put on hold," the report states. Instead, the department is concentrating on rolling out financial reporting improvements in three "waves," which are an audit of appropriations received, followed by a statement of budgetary resources, capped by a mission critical asset existence and completeness audit.

While testifying recently before a Senate panel, Robert Hale, the comptroller and DoD CFO, said the 2017 deadline for a clean audit is doable so long as the historic cost data isn't a requirement.

"If we try for everything, I'm afraid we'll get nothing once again. I believe firmly we've got to pick some priorities and go after it. The only way, in my mind, to set those priorities is to focus on what we use to manage in the Department of Defense," Hale said.

For more:
- download the May 2010 comptroller FIAR update report (.pdf)
- see a table  of planned FIAR spending from fiscal 2010 through fiscal 2014

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