The Air Force could not definitively confirm yesterday if it was on track to meet legally-required audit readiness for fiscal years 2014 and 2017.
“(The) short answer is yes, but there is risk in this work,” Air Force Secretary Michael Donley told the Senate Armed Services Committee in a response to questioning from Sen. Kelly Ayotte (R-N.H.). Ayotte said the cancellation of the Expeditionary Combat Support System (ECSS) Enterprise Resource Planning (ERP) software was a red flag in terms of audit readiness. ECSS cost the Air Force $1 billion without producing any apparent military capability.
Ayotte pressed Donley again, asking if the Air Force would, “as we sit in this hearing,” meet those audit readiness deadlines?
“We’re working very hard to get there,” Donley said.
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| Air Force Secretary Michael Donley. Photo: DoD. |
As legally required by the FY ’10 National Defense Authorization Act (NDAA), the Pentagon is working to have its financial statement ready to be audited before Oct. 1, 2017, as part of Financial Improvement and Audit Readiness (FIAR). Lawmakers often lament that the Defense Department’s books cannot be audited (Defense Daily, Oct. 7, 2011). The Office of the Secretary of Defense (OSD) also wants audit readiness for the general fund by the end of 2014.
Donley said the ECSS cancellation put “a little bit more emphasis” on the need to go forward with existing systems and to modify existing systems.
“It’s clear our Enterprise Research (Planning) programs are not going to all be in place to support this work,” Donley said. “So there is going to be a lot of manual work and a lot of work with existing systems to do that.”
Donley said the Air Force has been trying “very hard” to use outside monitors and experts to do pre-audit work. He said the service had intended to contract out some of that work, but said because that contract is under protest, it set the Air Force back. The Air Force in August awarded a $76.3 million contract to PricewaterhouseCoopers (PwC) for FIAR support, according to a notice posted on Federal Business Opportunities. Defense Daily could not confirm by press time if this is the contract under protest.
“We’re looking for opportunities to regain some lost time there,” Donley said. “We’re working very hard.”
The Air Force’s official explanation for canceling ECSS was that it was no longer a viable option for meeting the FY ’17 FIAR statutory requirement. 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.
The Air Force estimated in December it would have required an additional $1.1 billion for about a quarter of the original ECSS scope to be produced and fielding wouldn’t have taken place until 2020 (Defense Daily, April 5).
Donley said there are two ECSS reviews underway, one by OSD and one by the Air Force, and that the service is treating its ECSS review as seriously as it does an Accident Investigation Board (AIB) report. Donley said the Air Force took numerous steps to try to bring in ECSS by twice restructuring the program over a four- or five-year period by holding the program manager accountable and by breaking the program down into smaller chunks for better implementation. Donley said ECSS also was subject to increased oversight from the Air Force, OSD and two other offices.
Donley said he’s interested in learning if the reviews can help the service decide earlier on when to pull the plug on underperforming programs.
Senate Armed Services Committee Chairman Carl Levin (D-Mich.) and former Ranking Member John McCain (R-Ariz.) called ECSS “one of the most egregious examples of mismanagement in recent history” in a December letter to former Defense Secretary Leon Panetta (Defense Daily, Dec. 11).
CSC [CSC] was the prime contractor for ECSS.