The Defense Department is committed to transformation and
improving business operations but overhauling the financial
management and related business operations represents a huge
challenge, the General Accounting Office has said.
It said DoD’s management weaknesses hinder its ability to
produce auditable financial information and to provide timely,
reliable information for management and Congress to make
As a result, DoD needs an integrated business transformation
strategy, sustained leadership and resource control, clear
lines of responsibility and accountability, results-oriented
performance, appropriate incentives and consequences, an
enterprise-architecture to guide reform efforts, and
effective monitoring and oversight, said GAO.
It identified specific areas such as military pay as
problematic. Ninety-four percent of mobilized Army National
Guard soldiers it investigated had pay problems. These
problems distracted soldiers from their missions, imposed
financial hardships on their families, and had a negative
impact on retention, said GAO.
It said logistical problems such as asset visibility and
other support problems hampered mission readiness during
Operation Iraqi Freedom, and led to the cannibalization of
vehicles for parts.
Seventy-two percent of the over 68,000 premium class
airline tickets DoD purchased for fiscal years 2001 and
2002 were not properly authorized and 73 percent were not
properly justified, said GAO.
It also said chem-bio suits sold on the Internet for $3
while DOD purchased them for over $200 and that thousands
of defective suits were improperly issued to local law
enforcement agencies that are likely to be first responders
in case of a terrorist attack.
Echoing an earlier report, it said DoD contractors sometimes
get away with abusing the federal tax system. For example,
DoD had collected only $687,000 of unpaid contractor
federal taxes through a mandated levy program over the
last six years. At least $100 million could be collected
annually through effective implementation of the levy on
DoD contractor payments, said GAO.