Report | Sept. 13, 2013

Army Needs to Improve Controls and Audit Trails for the General Fund Enterprise Business SystemAcquire-to-Retire Business Process

DODIG-2013-130

What We Did

We performed this audit to determine whether the Army had adequate controls over recording accounting transactions within the Acquire-to-Retire (A2R) business process through the General Fund Enterprise Business System (GFEBS). We also determined whether the Army had verifiable audit trails to support these transactions.

What We Found

The Army had inadequate controls over the recording of accounting transactions for the A2R business process in GFEBS. This occurred because Army personnel did not: develop necessary real property functionality and fully implement their A2R business process prior to deploying GFEBS for the management of 13,427 buildings and structures; follow the data conversion strategy in converting real property data from the legacy system for Fort Lee and Redstone Arsenal; develop or implement processes in GFEBS to record $10 billion of construction costs in the general ledger; understand the financial impact of recording converted and purchased fixed assets as transfers-in; and have the ability to generate a transaction library from GFEBS. As a result, the Army will continue using inefficient legacy business processes and diminish the estimated benefits associated with business system modernization. Although the Army has spent $814 million on GFEBS, it did not provide Army decision makers with relevant and reliable financial information for real property, and it is unable to identify the cost to correct the unreliable real property information. In addition, the Army is at increased risk of not accomplishing the FY 2017 audit readiness goal. Accounting personnel created over $100 billion of adjustments because of the ineffective use of GFEBS in accounting for $160 billion of fixed assets reported on the FY 2012 Army General Fund Financial Statements. In addition, the GFEBS Program Management Office (PMO) did not maintain a verifiable audit trail for all land tracts reported in GFEBS. Because GFEBS PMO personnel did not follow their plan for converting land assets into GFEBS, the system’s land information is unreliable; the acreage of land at four activities was overstated by 247,850 acres; the Army will have to expend additional resources to correct GFEBS land information; and the GFEBS land information cannot be used to make financial decisions.

What We Recommend

Army officials should create working groups to implement functionality in GFEBS necessary for Army real property management; develop standardized procedures and controls that leverage all GFEBS capabilities; provide job-specific training; review all real property data, including land, in GFEBS for accuracy; develop integrated processes for recording construction costs; and develop procedures for converting fixed assets.  

Management Comments and Our Response

Management comments were responsive for three of twelve recommendations. We request that the Assistant Secretary of the Army (Financial Management and Comptroller) provide additional comments on Recommendations A.1 through A.3, A.5 through A.7.b, A.9, and A.10.