DOD financial reform hinges on IT

The Defense Department wants to use IT to modernize its financial management and improve audit readiness, two DOD finance officials recently testified on Capitol Hill.

“Our goal is to deliver a streamlined, Twenty-first century systems environment [comprising] IT capabilities that work seamlessly together to support effective and efficient business processes and operations,” Elizabeth McGrath, DOD's deputy chief management officer, and Robert Hale, under secretary of defense (comptroller), said in a joint statement July 28 to the House Armed Services Committee.

Their testimonies were part of the committee’s Defense Financial Management and Auditability Reform Panel. The day before, the two officials also testified before the Senate Armed Service Committee’s Readiness and Management Support Subcommittee.

Plans to reform financial management and audit readiness hinge on modernized business IT systems, McGrath and Hale said, noting that the improved acquisition, development and fielding of IT systems are top priorities.

The officials also highlighted the importance of implementing Enterprise Resource Planning systems and cited efforts improve the systems for procuring business IT systems, including an update to the DOD 5000.2 requirements process for major defense acquisition programs.

“These revisions will include an improved acquisition model for our defense business systems, called the Business Capability Lifecycle, which is ... an essential pilot effort for our broader IT reform effort,” they said.

McGrath and Hale stressed the need for a comprehensive approach to fixing DOD’s aging business processes and systems.

“We know that there are enterprisewide weaknesses in DOD financial management, and they demand an enterprise-wide business response,” they stated.