GAO charges DoD’s new financial IT systems are late and over cost

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GAO charges DoD’s new financial IT systems are late and over cost

DoD’s efforts to develop and implement Enterprise Resource Planning (ERP) systems is behind schedule and costing much more than expected, according to a new study by the General Accountability Office (GAO).  Asif A. Khan, GAO's Director for Financial Management and Assurance told a Senate committee that DoD is not achieving its ERP implementation goals due to ineffective management controls and inadequate testing.  As a result, GAO’s study shows that only one (Army’s General Fund Enterprise Business System) of the 10 ERPs expected to replace 500 legacy systems has been fully implemented as scheduled.  GAO also reported that only the three Army systems appear to be holding to the original cost estimates.  The current life-cycle costs of the Navy and Air Force systems and the Services’ Integrated Personnel and Pay Systems are running higher than original estimates by a total of $6.9 billion.  Khan did agree that the revised Financial Improvement and Audit Readiness (FIAR) plan provides a “reasonable approach” and is making progress toward achieving neat-term goals.  He said GAO supports the new prioritized approach and efforts to accurately and reliably report the cost of mission critical assets.  However, he questioned whether the plan is sufficient for long-term success.  Khan argued that past efforts have failed because DoD leadership has not sustained its focus and oversight.  He said DoD can only meet its long-term financial management improvement goals if it defines specific roles and responsibilities for department leaders, implements results-oriented metrics, and sustains effective oversight.

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