Fed up with the lack of progress Defense has made on modernizing its business systems, Congress is threatening fines of $5,000 and jail time for the department's comptroller if systems do not comply with the EA

Congress is enforcing its mandate that the Defense Department develop systems compatible with the DOD Business Enterprise Architecture'with the threat of jail time and hefty fines for the department's comptroller.

For years, lawmakers working on Defense budgets have demanded that DOD shape up its business systems. In the fiscal 2005 Defense authorization act signed by the president last month, they set a fine of $5,000 along with a possible two-year prison sentence for each time'starting Oct. 1'that Defense OKs spending $1 million or more for any system that does not comply with the BEA.

The language is tied to Title 31 of the Antideficiency Act, which makes it illegal for government agencies to use funds for projects outside authorized purposes.

The move is the latest attempt by lawmakers to force Defense to improve its business systems, many of which duplicate one another and fail to work together. So far, the department has identified 4,700 business systems running within Defense today'up from hundreds just a few years ago. DOD spends billions of dollars each year to operate, maintain and modernize its accounting, acquisition, logistics and personnel systems.

'I think the legislation is a step in the right direction in terms of governance, accountability and helping to bring together the integration of thousands of business systems in the department,' said Gregory Kutz, director of financial management and assurance for the Government Accountability Office.

Kutz said he has never seen an official go to jail for Antideficiency Act violations, but he thinks congressional leaders are looking for someone to hold accountable in rectifying the DOD's business systems problems.

Kutz said when he did his review of the department's Business Management Modernization Program in the summer, he found dozens of systems across the Army, Air Force and Navy'totaling $863 million in obligations'that were in clear violation of the act.

Marilyn Fleming, chief architect for Defense's Business Management Modernization Program, said DOD is listening.

'The goal is an unqualified auditing opinion,' Fleming said this month at the GCN 2004 Enterprise Architecture Conference in Washington. The department is shooting for a clean financial audit by 2007'which would be DOD's first unblemished financial review ever. 'The goal is how do I streamline my business and act like a corporation?'

GAO's Kutz said the application of the architecture would improve military business operations, such as paying active-duty troops and reservists and managing supplies.

Some think the $1 million threshold is set too low, but ultimately, Fleming said, it will help DOD ensure that all its systems meet architecture standards.

Before Tina Westby Jonas, the current comptroller and chief financial officer, approves funding for any business system, she must certify that it is being developed and managed in accordance with the department's Financial Management Modernization Plan.

A DOD guide issued earlier this year, IT Portfolio Management, provides Defense agencies with help on business modernization, Jonas said in an e-mail response to questions. The modernization program office uses the portfolio management guidelines to ensure that systems are bought and built correctly.

The document groups systems by functional similarities, helping managers eliminate redundancy, address gaps in capability and assure investment only in systems that comply with the business architecture, Jonas said.

Lawmakers did acknowledge that some systems rightly should be outside the architecture. In the authorization bill, Congress ordered Defense to create a panel to approve waivers on a case-by-case basis:
  • For systems deemed necessary to achieve a critical national security capability or address a critical requirement in an area such as safety or security
  • To prevent a significant adverse effect on a project to achieve an essential capability.
    The business systems overhaul is 'the largest transformation effort in government or industry,' Fleming said. Because it is unparalleled in its management scope, DOD has no models to pattern the program after, she said.

    Kutz agreed, saying the scope of the project is bigger than any enterprise architecture effort he has ever seen.

    'The size and complexity even dwarfs Wal-Mart,' he said. 'DOD is much more complicated than any other organization.'

    DOD must do a better job of managing the systems it approves for development, Kutz said. In his report to Congress, he said the department had failed to build a central systems repository for the modernization effort or define what a business system is.

    GAO also criticized the BMMP office for poor top-level accountability, deeply embedded cultural resistance to change, lack of performance measures, and inadequate incentives and monitoring mechanisms.

    But the BMMP office contends things are turning around. Earlier this year, DOD accepted financial improvement plans from the military services on ways each planned to comply with the comptroller's accounting policies.

    In late summer, DOD and BMMP contractor IBM Corp. released Version 2.2 of the business architecture, which includes DOD's Enterprise Business Process Model, and recently delivered Version 2.21, which includes the Standard Financial Information Structure.

    To read the Business Enterprise Architecture documents, go to www.gcn.com and enter 332 in the GCN.com/search box.


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