Publicly released: December 2, 2019
Objective
The objective of this followup audit was to determine whether the Army implemented appropriate corrective actions in response to seven open recommendations in Report No. DODIG-2013-130, “Army Needs to Improve Controls and Audit Trails for the General Fund Enterprise Business System Acquire-to-Retire Business Process” and three open recommendations in Report No. DODIG-2014-090, “Improvements Needed in the General Fund Enterprise Business System Budget-to-Report Business Process.”
Background
The General Fund Enterprise Business System (GFEBS) was developed for the Army by a third-party contractor and was implemented to standardize the Army’s financial management and accounting functions and asset inventory and management. Report No. DODIG-2013-130 and Report No. DODIG-2014-090 reviewed the implementation of two business processes in GFEBS, Acquire-to-Retire (A2R) and Budget-to-Report (B2R), respectively. The A2R end-to-end business process includes all business functions necessary to obtain, manage, and dispose of capitalized assets, such as buildings, improvements, and renovations; other structures and facilities; and equipment. The B2R end-to-end business process includes all business functions necessary to plan, formulate, create, execute against, and report on the budget and business activities of the entity, including updates to the general ledger.
Report No. DODIG-2013-130 determined that the Army had inadequate controls over the recording of accounting transactions for the A2R business process in GFEBS. In addition, the report identified that the GFEBS Program Management Office did not maintain a verifiable audit trail for all land tracts reported in GFEBS. We made 12 recommendations, of which 7 remained open as of May 13, 2019. In the seven open recommendations, we recommended that Army officials create working groups to implement functionality in GFEBS necessary for Army real property management; review all real property data, including land, in GFEBS for accuracy; and develop integrated processes for recording construction costs.
Report No. DODIG-2014-090 determined that the GFEBS Program Management Office and Army Budget Office personnel did not implement the B2R business process to properly support the Army General Fund Statement of Budgetary Resources. We made six recommendations, of which three remained open as of May 13, 2019. In the three open recommendations, we recommended verifying the accuracy and completeness of GFEBS posting logic documentation, validating GFEBS general ledger account postings, reconfiguring GFEBS to properly record B2R transactions, and using GFEBS to execute all Army General Fund appropriations.
Finding
In response to the previous recommendations, Army officials implemented corrective actions, such as the identification of A2R real property management functionality missing in GFEBS; the implementation of an automated function that enables the Assistant Secretary of the Army (Financial Management and Comptroller) (ASA[FM&C]) officials to provide a library of FY 2018 transactions posted in GFEBS; and the accurate posting of nonexpenditure transfers recorded in the first three quarters of FY 2019. The Army’s corrective actions led to the closure of four recommendations in this followup audit report. However, Army officials did not implement the corrective actions needed to support the proper recording of A2R and B2R accounting transactions. These deficiencies included the inability to generate an Army-wide real property universe; the absence of complete real property elements within GFEBS; the existence of noncompliant transaction postings in GFEBS; and the absence of a process to record minor construction-in-progress costs in GFEBS. In addition, GFEBS’ land data does not reflect the true amount of land acreage or land values, as compared to the land data held in the U.S. Army Corps of Engineers’ Real Estate Management Information System, systems controls did not address noncompliant transaction postings in GFEBS, and GFEBS was not used to execute all Army General Fund appropriations. These conditions continued to exist because Army officials did not prioritize system change requests identified in the prior audits, and therefore did not implement the corrective actions to address all the deficiencies identified. As a result, GFEBS continued to contain unreliable A2R and B2R data. In addition, due to the lack of the corrective actions taken, we still consider six of the previous ten recommendations to be open. (don’t forget the periodJ)
Recommendations
In addition to implementing the corrective actions related to the six remaining open recommendations from the previous two DoD Office of Inspector General audits, we recommend that the ASA(FM&C) and the Assistant Chief of Staff for Installation Management determine whether the land data can be removed from GFEBS, or alternatively, update GFEBS to match the data held in the Real Estate Management Information System, the Army’s designated real property system of record.
Management Comments and Our Response
The Deputy Assistant Secretary of the Army (Financial Operations), responding on behalf of the ASA(FM&C) and the Assistant Chief of Staff for Installation Management, stated that as of September 29, 2019, the Army removed all except two land records from GFEBS. The GFEBS Project Management Office, ASA(FM&C), and the U.S. Army Corps of Engineers are coordinating to remove the remaining land records from GFEBS. The actions taken are sufficient to resolve the recommendation. We will close the recommendation once the removal of land records is completed and verified.
The Deputy Assistant Secretary of the Army (Financial Operations) also provided followup comments that discussed the actions management has ongoing on the recommendations from the prior audit that remain open. Ten of the recommendations from the two prior reports remain resolved and open. See the Management Comments section for the specific comments regarding the open recommendations.
This report is a result of Project No. D2019-D000FI-0158.000.