The Air Force still risks missing its legally-required Sept. 30, 2014, deadline of having its statement of budgetary resources (SBR) audit-ready, according to the service’s number two civilian.
As part of an effort called Financial Improvement and Audit Readiness (FIAR), the FY ’13 National Defense Authorization Act (NDAA) requires the Defense Department’s SBR to be audit-ready by the end of FY ’14. The FY ’10 NDAA also requires DoD’s financial statements to be audit-ready by Sept. 30, 2017.
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| Acting Air Force Under Secretary Jamie Morin. Photo: Air Force. |
Acting Air Force Under Secretary Jamie Morin said yesterday the service continues to press forward aggressively on the 2014 and 2017 deadlines, but it lost progress last year due to a six-month contract protest that took its independent public accountant advisers out of work. The Air Force in August 2012 awarded a $76.3 million contract to PricewaterhouseCoopers (PwC) for FIAR support. PwC spokeswoman Caroline Nolan said yesterday Kearney & Co. protested their FIAR support contract and that the protest was denied. A phone call to Kearney was not returned by press time.
“We will not have our objective future financial systems fully-fielded by the 2014 deadline, so there is some risk in the 2014 deadline,” Morin told the Senate Armed Services Committee (SASC) during his nomination hearing to become DoD’s next Director, Cost Assessment and Program Evaluation (CAPE), a key position that is said to keep an critical eye on the true cost of weapons programs.
Former Air Force Secretary Michael Donley told SASC in May it risked meeting those audit deadlines, though his “short answer” was the service would make the deadlines (Defense Daily, May 8). This prompted SASC members Kelly Ayotte (R-N.H.) and John McCain (R-Ariz.) and Senate colleague Tom Coburn (R-Okla.) to fire off a June 25 letter to the Air Force expressing its concern that Donley’s testimony did not reassure them the Air Force would meet its deadlines. The letter also urged the Air Force to redouble its efforts to achieve auditability and provide answers regarding its inability to meet auditability milestones.
The senators, in their letter, cited information from a biannual FIAR plan status report released by DoD in May. The next one is due in November, according to the senators.
Morin also said the Air Force made progress in identifying near term actions to take with existing legacy financial systems to give it the best chance at meeting the 2014 deadline. The Air Force has been under fire by lawmakers for its Expeditionary Combat Support System (ECSS), which it canceled in 2012 after spending approximately $1 billion on without apparently producing any significant military capability.
ECSS was an information technology (IT) effort to globally view, standardize and manage logistics resources to help close process gaps. ECSS was also to use ERP software to more efficiently manage logistics like end items, materiel and people (Defense Daily, April 5).
The Air Force has another troubled accounting program called the Defense Enterprise Accounting and Management System (DEAMS), which is a Major Automated Information System that uses commercial-off-the-shelf (COTS) Enterprise Resource Planning (ERP) software to provide accounting and management services. In its FY ’12 annual report to Congress, the DoD’s director, operational test & evaluation (DOT&E) office said DEAMS, in addition to its $2 billion overrun, is 7.5 years behind schedule.
DOT&E said DEAMS was neither making sufficient progress toward achieving audit readiness of the SBR by the end of 2014, nor toward achieving full financial auditability by the statutory 2017 deadline. The Air Force said in January it stood behind DEAMS, which is still active (Defense Daily, Jan. 25).