Defense Financial Executives Facing Perfect Storm of Challenges
Fiscal uncertainty, worker morale, and audit readiness cited as biggest issues
ALEXANDRIA, Va., June 19, 2013— According to the most recent survey of Defense financial management executives conducted by the American Society of Military Comptrollers (ASMC) and Grant Thornton LLP, ninety-four percent of respondents say the challenges they face are greater than ever. Both managers and executives say they face a perfect storm of challenges: fiscal uncertainty, worker morale, and audit readiness. Of the three challenges, the risk to audit readiness is the most prevalent; executives say they are not confident they will be ready for audit.
“While the listed challenges are not new, the scale and combination of them is what creates the perfect storm for government managers and executives,” said Al Runnels, Executive Director of ASMC. This year’s survey focuses on current fiscal concerns and the tools, techniques, initiatives, and workforce with which DOD leadership will navigate the Department through this perfect storm. The survey report concludes that with few exceptions, sequestration forces program managers to make reductions across all programs without discretion. At the same time, managers and executives at all levels are looking for guidance to steer their organizations to practical solutions that minimize impact on mission. The respondents to this survey voice concerns over the continuing effects of these reductions on the budget cycles beyond FY 2013, as well as their impact on audit readiness.
“These survey results suggest there is a real risk that investments in audit readiness may not be enough to meet the aggressive audit deadlines facing Defense financial management executives,” said Grant Thornton Global Public Sector Managing Principal, Srikant Sastry. “In light of limited resources, Defense agencies may need to move directly to audit before we’ll know for sure.”
This is the 11th year the ASMC and Grant Thornton have sponsored an annual survey of Defense executives and staff on their views of major issues impacting Defense financial management. The “executives” in this survey are the 35 defense financial leaders interviewed in-person by Grant Thornton partners and senior leaders. The “managers” are the 1,006 defense financial professionals who responded to an online survey of the ASMC membership. This year’s response represents a 40 percent increase compared with last year’s survey.
Among the other major findings of the survey:
- Investments in information technology (IT) have achieved a less than expected return on investment because they added complexity and increased workload. Respondents believe a new strategy focusing on cost and performance is critical to the success of IT investments.
- Across the board cuts exacerbate the already deep challenges of fiscal uncertainty, declining morale, and audit readiness demands. Defense organizations indicate they need better cost information so they know which cuts matter and which ones don’t.
- Audit and audit readiness, respondents say, could produce an ancillary benefit of identifying financial management improvements that result in real savings.
- Respondents say they have less choice in acquisition strategy, which may limit the benefits they get from contracts. They want to see more focus on elimination of redundancy rather than on acquisition initiatives that don’t impact or negatively impact mission.
- Expecting Defense organizations to maintain financial management momentum with fewer resources is unrealistic.
You can access the full report at http://bit.ly/11lmoG6
About the American Association of Military Comptrollers
ASMC is the non-profit educational and professional organization for persons, military and civilian, involved in the overall field of military comptrollership. ASMC promotes the education and
training of its members, and supports the development and advancement of the profession of military comptrollership. The society provides professional programs to keep members abreast of current issues and encourages the exchange of information, techniques and approaches. For more information, visit ASMC at www.asmconline.org
About Grant Thornton LLP’s Global Public Sector
Grant Thornton’s Global Public Sector practice helps government executives maximize performance and efficiency in the face of tightening budgets and increased demand for services. Its Public Sector practice offers clients creative, cost-effective solutions that enhance acquisition, financial, human capital, information technology and performance management. Grant Thornton's commitment to public sector success is evidenced by widely recognized thought leadership analyzing and recommending solutions to government's greatest challenges. Based in Alexandria, Va., with offices in Austin and San Antonio, Texas and Sacramento, Calif., Grant Thornton's Global Public Sector serves federal, state, local and international governments. For more information, visit www.GrantThornton.com/publicsector.
About Grant Thornton LLP
Grant Thornton LLP is the U.S. member firm of Grant Thornton International Ltd. Grant Thornton International Ltd and its member firms are not a worldwide partnership, as each member firm is a separate and distinct legal entity. In the United States, visit Grant Thornton LLP at www.GrantThornton.com.
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