GAO chides DOD for decentralized spending

The Defense Department is testing an automated system for analyzing how officials spend money on services, partly in response to criticism from the General Accounting Office.

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

GAO compared the department with five companies in evaluating how it acquired services and found that the companies were miles ahead of DOD in the way they organized their spending data.
GAO urged DOD to continue creating an automated system for the spending analysis 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, said DOD is beginning to apply commercial best practices to analyze 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 secretary Donald Rumsfeld direct the undersecretary of Defense for acquisition, technology and logistics to develop a schedule for accomplishing changes in management structure and business processes. GAO wants DOD to present that plan to congressional Defense committees for approval.

Process improvements

'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 responded.

DOD is the largest buyer of services in the federal government, 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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