DOD audit sparks new financial database

The Defense Department's failed audit has given rise to a new financial database. DOD is piloting a new tool to better track organization's transactions and look for anomalies as a result of the department's first complete audit released in November, Acting Deputy Defense Secretary David Norquist said during a Jan. 9 Center for the National Interest event in Washington, D.C.

The database pilot program will include the inspector general's 2,371 audit findings, and also adds a layer of transparency. Budget analysts will be able to click on an DOD agency and see all the transactions the organization made for spending to date, Norquist said. Additionally, analysts will be able to run queries on the transactions and look for patterns, as well as progress on corrective action plans across the services and agencies.

As we start creating and improving our databases," said Norquist, who is confirmed as DOD's chief financial officer, "and you can sort them, and analyze them, and use data lakes and modern tools, our ability to support the rest of the reform efforts across the department the way other commercial firms [do] gets dramatically improved."

Norquist said the database will help reduce costs over time and is "critical for accountability, knowing who you have to work with and which organizations you may have to change out leadership or do training, and which types of challenges you're facing."

IT security is chief among those challenges with largely known weaknesses in financial and business management systems, including antiquated military pay systems.

Norquist said DOD doesn't have a predetermined figure for how much fixing the IT systems will cost, but indicated that the result will be a multi-year "triage" for the CIO office to "close those gaps as quickly as possible." That triage will involve shuttering some systems and adding controls to others, he said, with plans to decommission over time.

During his presentation, Norquist stressed that last year's audit would be a foundation for future cost savings, though he did not offer an dollar estimates. He added that automating manual processes across the department would be a key driver.

"Everything that requires manual intervention costs more," he said, and switching to automation throughout the organization will help drive down those costs.

Additionally, DOD is already making its way through a second audit and has reached a top line budget number for its 2020 submission, but Norquist declined to give more details.