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Defense Department officials Tuesday defended their plans for improving management of their financial and business systems against charges from members of a Senate Homeland Security and Governmental Affairs subcommittee that their efforts are slow and insufficient.

"I am not sure large quantities of change have occurred," said Sen. Tom Coburn, R-Okla., who pressed Pentagon officials to commit to more frequent consultation with the Federal Financial Management Subcommittee and the Government Accountability Office.

At issue is billions of dollars the department spends each year on separate business and financial systems. Defense since 1990 has been attempting to modernize thousands of unique accounting and information systems that limit its ability to track many of its costs.

The department has a large component, the Business Transformation Agency, dedicated to steps such as combining software systems and applying the Lean Six Sigma business improvement methodology across the department.

Defense Principal Deputy Undersecretary David Patterson testified that by 2009 the Pentagon expects to earn clean audit opinions on 39 percent of its assets, up from almost none in the 1990s. Patterson said that is a significant achievement for what he called "the largest and most complex organization in the world."

But subcommittee members faulted the department for its continued failure to collectively achieve a clean audit, which members said is among the management problems that affect war efforts.

"Not having an audited financial statement, not having procurement under control is in fact costing lives," Coburn said.

Subcommittee members faulted especially Pentagon officials' resistance to congressional pressure to create a full-time, high-level chief management officer to push through changes.

Critics say top department officials struggle to see through reforms because they are too busy and not on the job long enough. That argument has been advanced especially by Comptroller General David Walker.

The fiscal 2008 defense authorization bill would require the Pentagon create a full-time chief management officer reporting to Deputy Defense Secretary Gordon England. The official would have a fixed term allowing him or her to stay on beyond the current administration.

The Pentagon has resisted that effort, arguing that England fills a CMO role and adding a position would create unneeded bureaucracy.

Deputy Undersecretary of Defense for Business Transformation Paul Brinkley said at the hearing that by mandating a CMO, Congress would limit the department's flexibility.

Walker rejected that stance. "The only outlier in this [CMO] debate is the Department of Defense," he said. "And frankly I'm growing a little frustrated."

COMMENTS

• I find it less than amusing that Congress has so little appreciation for the plight of the federal worker (NSPS, etc), yet expects so much from us in the form of re-engineering highly complex systems and processes that keep the DOD a viable fighting force. Some of the systems we use are so complex that recent multi-million dollar attempts at modernizing them have failed. This isn't due to the lack of quality replacement platforms or programmers. Many of the core systems used were constantly developed and enhanced "in house" over the course of decades. These immense, detailed systems allowed many federal agencies to provide increasingly better services for little or no cost increase. Now that many of the highly trained specialists that understood the inner workings of these systems have been downsized... right-sized... out-sourced... (pick your favorite politically correct term), it is becoming blindingly apparent that once again, the rosy plans set forth by Congress have created more problems than they solved. The DOD has been in consolidation mode since well before the CFO Act of 1990. It isn't difficult to shut down facilities and cram their similar functions into a central location. The hard part is retaining the years of knowledge your kicking out the door. That knowledge is crucial for re-engineering. Here's a suggestion for what I truly believe to be the best approach. Start at the bottom! Re-establish individual systems shops in the major activities and have them report to an over-arching command. Spend the money where you actually have some functional knowledge and you might actually achieve results. Ohio Fed Posted October 18, 2007 4:44 PM
• Senators. When will you get it. We are not in "business for profit" and yes, trying to mold us from business models that refine processes for a higher ROI is very difficult when your not looking at that bottom line. After 32 years, I am finally stumped. It doesn't have to be this hard. However, when all of your experience walks out the door and all of those newbee's get the work of the "older" employee and can't hack it and in turn follow the older worker out the door, maybe you'll wake up. Times have changed. This generation doesn't stay in a job for security like we did. They don't work where they are unhappy AND that makes for bad "business". Sorry I can't say anything about the financial system because as far as I know, there hasn't been one to improve on for 32 years. Everyone seems to do their own thing, laws or no laws, and nothing ever happens to them, even when audited. That tells me the auditors are just as inempt as the financial managers. It isn't rocket science. If "we the employees" know what's going on, why can't you figure it out. PD Posted October 18, 2007 9:44 AM
• When was the last time the Congress got the budget out on time? DoD is struggling toward consolidating systems and using the most up-to-date technology. As a "line" employee the pace of change often seems overwhelming: in FY2007 I've been in three LSS events and implemented resulting changes; been moved into NSPS and had my entire organization competency to a new organizational structure. And Navy ERP is on the horizon. Kathy Howard Posted October 18, 2007 9:20 AM