GAO shakes its financial finger at Defense

The Defense Department is piloting an automated system for analyzing how officials spend money on services, in response to recent criticism from a General Accounting Office report.

In the report released this week, Best Practices: Improved Knowledge of DOD Service Contracts Could Reveal Significant Savings, the GAO criticized DOD for having a spending process that is 'decentralized, insufficiently rigorous and unreliable.'

GAO compared the department to five companies in evaluating how it managed services acquisitions and found that the companies were miles ahead of DOD in the way they organized their spending data.

GAO urged DOD to continue its work of creating an automated system for the spending analysis process that consolidates accounts payable data.

'Although DOD is taking actions to address these problems, it has a long way to go,' Jack L. Brock Jr., managing director of acquisition and sourcing management for GAO, wrote in the report.

Col. Lyndi Balven, who works in the Defense Procurement and Acquisition operations office, replied that DOD is beginning to apply commercial best practices in how it analyzes spending trends.

The department agreed with GAO's recommendation that it needed to continue to push the automated system, using accounts payable and other internal financial and procurement data to get a big picture of spending.

But Defense disagreed with a second GAO recommendation that Defense secretary Donald Rumsfeld direct the undersecretary of Defense for acquisition, technology and logistics to develop a plan and schedule for accomplishing changes in management structure and business processes. GAO wants DOD to present that plan to congressional Defense committees for approval.

'The department is already pursuing internal changes through the President's Management Agenda as well as other business process initiatives that we anticipate will allow us to support enhanced data collection and analysis,' DOD's responded.

In the federal government, DOD is the dominant buyer of services, accounting for $79 billion in 2001'more than half of the $140 billion spent by the entire federal government, according to GAO.

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