Audit readiness

David Norquist, the deputy secretary of Defense, said the nascent audit process — expensive as it is — is largely paying for itself already.

Navy ERP, the Navy’s massive enterprise resource planning system, went live in a commercial cloud last week. Officials said it was likely the largest ERP cloud migration in North American history.

A “disclaimer of opinion” was a foregone conclusion for Pentagon’s first financial audit before it even started. Now the focus turns to what the Defense Department will do with the findings.

The Senate Armed Services chairman says he’ll withhold acquisition approvals from DoD programs unless the department completes its first financial audit.

Amendment set for Senate debate this week would focus DoD’s attention on fixing weaknesses in “feeder systems” that supply vital financial data.

At the confirmation hearing for Patrick Shanahan, the Senate Armed Services Committee chairman admonished the nominee for deputy Defense secretary to resubmit his written answers with more detail, saying that the Senate will not serve as a “rubber stamp” for Defense nominees.

The Pentagon’s new comptroller says the department will meet it statutory deadline to become “audit ready” by the start of Fiscal 2018. But there’s little chance DoD will pass an audit in its first year.

GAO found significant problems in the military’s ability to track its own weaknesses both at the level of the individual military services and at the level of the Pentagon’s comptroller.

While the federal government as a whole has made major progress toward getting its books in audit-ready condition over the past two decades, the Defense Department remains the single biggest impediment, the Government Accountability Office said last week in its annual report on the federal government’s financial statements.

The Obama administration has already voiced its objections to the major reshuffling of DoD’s organizational chart the Senate proposed in its version of this year’s Defense authorization bill.