In 1997, the Army began an “upgrade” to its system for tracking spending. The upgrade was done to the Standard Army Management Information Systems (STAMIS) because it did not comply with federal laws requiring that it be “financially auditable.”
On Wednesday an inspector general’s report found that the new system, after 17 years and investing $725 million still does not comply with that auditability need — and the wasteful spending is only one sixth of the amount the Army plans to spend on this system, the projected total cost for the system which will be fully implemented by 2017 is $4.3 billion.
The new system, known as Global Combat Support System-Army (GCSS-Army) according to the Army description:
“[Is a] modernized application will subsume outdated Standard Army Management Information Systems (STAMIS) that are not financially compliant and integrate about 40,000 local supply and logistics databases into a single, enterprise-wide authoritative system.”
The IG report, in a section headed Insufficient Implementation of Treasury and DoD Financial Reporting Requirements, says:
“Deputy Inspector General for AuditingAudit, Global Combat Support System, Army, Financial Reporting, DoDOASA(FM&C) and PMO personnel did not field GCCS–Army with the proper functionality to comply with Treasury and DoD guidance, which is necessary to provide reliable financial information and support for audit readiness requirements. Specifically, GCSS–Army did not:
- comply with Treasury guidance for 5 of 15 account attributes tested, equating to approximately $1.8 billion5 of financial impact;
- comply with DoD guidance for defining debit or credit balances 6 of 16 accounts with a net balance of $274.7 million7;
- timely comply with the FY 2013 DoD SCOA changes;
- define its posting logic;
- include posting logic necessary to attain the same results as the Transaction Library; or
- correctly post transactions for three accounts affecting the Statement of Budgetary Resources.
Deputy Inspector General for AuditingAudit, Global Combat Support System, Army, Financial Reporting, DoDThis occurred because DoD and Army management did not have adequate controls, including procedures and annual reviews, in place to ensure GCSS–Army compliance with Treasury and DoD guidance. “
The IG found that the Army has been “responsive to correcting deficiencies” but noted that a large amount has already spent without substantially addressing accountability issues.
With these obstacles to identifying spending issues it is not difficult to imagine that the amount already spent on the “improved” system is greater than the $725 million the Army has reported. One thing that is certain is that while the right is busy trying to find ways to cut “waste” in social welfare programs which accounted for 12 percent of federal spending in 2013 there is much more opportunity to find and cut waste in defense spending which accounted for 24 percent of the 2013 budget.
h/t: Washington Examiner