What We Did
We determined whether the Defense Logistics Agency (DLA) configured the Enterprise Business System (EBS) to implement the U.S. Government Standard General Ledger (USSGL) at the transaction level using the Standard Financial Information Structure (SFIS).
What We Found
EBS program managers did not configure the system to report USSGL financial data using the SFIS data standards. Specifically, they did not properly implement 99 business rules, the SFIS posting logic, and 41 attributes; establish and update EBS’s capability to record and report 241 DoD reporting accounts; or establish EBS’s capability to generate trial balance data and report the data to financial systems. This occurred because DoD managers did not initially establish the stringent validation and certification procedures implementing SFIS requirements correctly and DLA did not prioritize its funding to ensure that EBS complied with the SFIS requirements. As a result, DoD managers approved EBS funding and did not require SFIS implementation before developing and deploying additional EBS capabilities. As of September 30, 2012, DLA obligated more than $2 billion to develop and deploy an Enterprise Resource Planning system that was incapable of providing standardized data for an auditable DoD Statement of Budgetary Resources by FY 2014. In addition, DLA missed opportunities to reduce the more than $30 million that it pays the Defense Finance and Accounting Service annually to perform accounting functions by enhancing EBS functionality.
What We Recommend
We recommend that the Deputy Chief Management Officer and Deputy Chief Financial Officer restrict funding until EBS program managers demonstrate that EBS contains all SFIS requirements. After DLA certifies SFIS compliance, DLA should conduct a one-time validation to document that EBS program managers correctly implemented all SFIS requirements and then validate EBS after each subsequent SFIS update. We also recommend that DoD managers extend the validation processes to all DoD Enterprise Resource Planning systems and publish a definitive listing of business rules needed for FY 2014 financial reporting. We recommend that the Director, DLA, develop a plan of action and milestones to implement the most recent SFIS requirements, an alternate chart of accounts, and the functionality to internally crosswalk to the new alternate chart of accounts. The Director should also develop procedures to update EBS for changes in the DoD Standard Chart of Accounts.
Management Comments and Our Response
Comments from the DoD Deputy Chief Management Officer, Deputy Chief Financial Officer, and the DLA Deputy Director were generally responsive. However, we request that they provide additional comments.
This report is a result of Project No. D2012-D000FI-0058.000.