Hale: Business processes an obstacle to DoD clean audits


When the Marine Corps tried auditing its statement of budgetary resource, it found that its information technology system wasn't the main obstacle toward getting a clean opinion, said Robert Hale, the Defense Department comptroller before a July 28 House panel.

The Marine Corps have "a pretty decent and fairly integrated system," Hale told the House Armed Services panel on defense financial management and accountability reform.

Rather, the main problem proved to be business processes optimized for operational needs but not conducive to auditability, Hale added.

"For example, we do bulk obligations of military pay. The auditors want it done in a much more detailed fashion," he said.

Lack of integrated IT systems is nonetheless a problem with most of the Defense Department.

Most systems "don't keep track of data at the invoice level," Hale said. "When an auditor wants to check our payments, they want to see an invoice," but currently matching payments to invoices, contracts and receiving reports is mostly a manual process.

The Defense Department is under a 2017 deadline to achieve a clean audit of its books, a goal that Hale in other hearings has said is achievable so long as historic cost data isn't a requirement.

Asked during the hearing about the tendency for weapon system costs to go beyond estimated costs, Hale acknowledged that the DoD tends "to be overly optimistic."

"In some cases, we're paying for game changing capabilities. I think stealth capability has been extremely costly, because every time you exercise with a weapon and its hits a rock or a bird, you have to recoat it," he said. "On the other hand, it's been a warfighter's game change."

For more:
- go to the hearing webpage (prepared statements and webcast available)

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