ERPs continue to fail the DOD

The Defense Department is not going to be able any time soon to produce auditable financial statements on its own programs because its major enterprise resource planning programs (ERP) continue to remain late and way over budget, according to a June 13 report from the DOD Inspector General.

The DOD IG identified six ERP systems they deemed necessary to replace legacy systems and enable the department to produce auditable financial statements: General Fund Enterprise Business System (GFEBS), Logistics Modernization Program (LMP), Defense Enterprise Accounting and Management System (DEAMS), Defense Agencies Initiative (DAI), Navy ERP, Enterprise Business System-Energy Convergence (EBS-EC) and EBS-EProcurement.

According to the IG, those six ERP systems have experienced cost increases of $8 billion, and been delayed for anywhere from 1.5 years to 12.5 years.

As a result, there is “risk that DOD will not achieve an auditable Statement of Budgetary Resources by FY 2014 or accomplish its goal of full financial statement audit readiness by FY 2017,” according to the report.

The IG also blamed the DOD deputy chief management officer (DCMO) and the chief management officers (CMO) of the military departments for not verifying “business processes were streamlined and efficient as required by Public Law 111-84, “National Defense Authorization Act For Fiscal Year 2010.”

This occurred, according to the report, “because DOD officials relied on the program management offices’ self-compliance assertions when they certified and approved funding of $302.7 million, instead of reviewing the business processes and verifying the accuracy, completeness, and reliability of the Program Management Office submissions. As a result, there is an increased risk the ERP systems will incur additional delays and cost increases to ensure the systems are as streamlined and efficient as possible.”

According to the DOD IG, the DOD DCMO did not respond to the draft report. The Undersecretary of Defense (Comptroller) and chief financial officer of the DOD, as well as the CMOs of the Army, Navy, and Air Force agreed with the IG’s recommendations, though the Army and Air Force CMOs did not address corrective actions.

About the Author

Barry Rosenberg is editor-in-chief of Defense Systems. Follow him on Twitter: @BarryDefense.

Reader Comments

Wed, Sep 19, 2012 maureen dorrian oriskany ny

i workedfor DFAS a DOD agency for almost 15 years. The GFEBS accounting system is a total JOKE. IT DOES NOT WORK. We use to beable to pay the Army's bills at a very reasonable amouintof time. This new system takes us a minumum of 1/2 hout to figure out one payment. There are hundreds of thousands of unmatched collections thqt we cannot find. I don't know whos ass the big boys kissed getting this system but boy were they sold the Brooklyn Bridge. Ask any DOD employee in DFAS and they will tell you it is not working. No matter what the higher ups tell you. Ask why so many vetern employees have left federal sevice! or the highly re4cruited college grads witha a asccounting degree some and go so fast that they need a revolving door. I was very happy working at DFAS but I coulod not take the crap that was being shoved down our throats.

Mon, Jul 23, 2012 SilentSam

What, this is a surprise to anyone...then the wool has been well pulled over the eyes, the emperor has new clothes and the big switch Navy threw two years ago was a facade (that's sham for all you others). The program is in dire need of revamping but DoD kepps maching along boldly...much like the Light Brigade did.

Mon, Jul 23, 2012 Cowboy Joe

Main problem we've seen with the ERP's aren't the databases themselves, it's just that the user interfaces look like they were written by a bunch of "Sheldons" on acid. Not that HSI has ever been a problem in the DoD...

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