Report | Sept. 28, 2012

An Unreliable Chart of Accounts Affected Auditability of Defense Enterprise Accounting and Management System Financial Data

DODIG-2012-140

What We Did

The U.S. Air Force’s (USAF) auditability is dependent on successfully deploying the Defense Enterprise Accounting and Management System (DEAMS). The current DEAMS life-cycle cost estimate is $2.1 billion. As of March 31, 2012, DEAMS expenditures totaled approximately $322.2 million.

We determined whether the DEAMS fulfilled selected functional capabilities needed to generate accurate and reliable financial management information.

What We Found

DEAMS lacked critical functional capabilities needed to generate accurate and reliable financial management information. DEAMS managers did not maintain an adequate Chart of Accounts (COA). In addition, DEAMS did not report Standard Financial Information Structure (SFIS) financial data directly to the Defense Departmental Reporting System (DDRS). These occurred because:
  • Functional Management Office (FMO) personnel did not monitor changes to the COA and document policies and procedures for modifying the COA, and
  • DoD and USAF management initially decided not to report financial data directly to DDRS until fourth quarter FY 2016.

DEAMS data lacks validity and reliability. Unless the unauthorized changes and inconsistencies in the DEAMS COA are corrected, DoD and USAF management cannot rely on DEAMS information to make sound business decisions. Further, DEAMS management cannot ensure updates to the DEAMS COA are performed correctly and consistently. In addition, the approved plan for reporting directly to DDRS may challenge the USAF’s ability to obtain audit readiness for the Statement of Budgetary Resources before the end of FY 2014. Further, unforeseen delays with reporting SFIS financial data directly to DDRS may impede USAF’s ability to achieve audit readiness on the remaining financial statements by FY 2017.

On November 14, 2011, we issued a Quick Reaction Memorandum discussing the unauthorized changes to the DEAMS COA.

What We Recommend

We recommend that the Assistant Secretary of the Air Force for Financial Management and Comptroller perform validations of the corrective actions for the unauthorized changes and inconsistencies in the DEAMS COA before further deployment to ensure the corrective actions are operating as intended. The Functional Manager, DEAMS FMO, should implement monitoring controls to identify inconsistencies in the DEAMS COA data, determine whether inconsistencies in the account data affected any other areas of the system, and document policies and procedures for modifying the DEAMS COA.

Management Comments and Our Response

The Principal Deputy Assistant Secretary of the Air Force (Financial Management and Comptroller), provided comments and agreed to the recommendations for the Assistant Secretary of the Air Force (Financial Management and Comptroller) and the Functional Manager, DEAMS FMO. Therefore, no additional comments are required.