Pentagon Financial Management Problems

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Excerpt from Pentagon Financial Management Problems: Hearing Before the Committee on Governmental Affairs, United States Senate, One Hundred Third Congress, First Session, July 1, 1993 It is going to take a lot of leadership, it is going to take a lot of effort, and what we want is to work with them and I am hoping that we will soon have the leadership in place. One of the problems I do want to mention, Mr. Chairman, is the M account problem, too; that is, when legislation was enacted, the IG concluded that the M account balances were so materially misstated and inadequately managed and vulnerable to abuse that we have a $649 million difference between the control accounts and the supporting accounts at the Air Force. Again, we now have to have a system that can work this out. This shows the kinds of problems that you have when you have these very weak systems and problems. So, Mr. Chairman, that concludes an overall summary. I would like a detailed statement put in the record if that would be pos sible. We would be happy to answer any questions. Chairman glenn. Without objection, it will be included. I hope everyone reads your statement. I want to go through some details of it that you haven't really gotten into. First, we will have a 6 minute rule here. The Corporate Information Management setup that we have now, is that going to help any? About the Publisher Forgotten Books publishes hundreds of thousands of rare and classic books. Find more at www.forgottenbooks.com This book is a reproduction of an important historical work. Forgotten Books uses state-of-the-art technology to digitally reconstruct the work, preserving the original format whilst repairing imperfections present in the aged copy. In rare cases, an imperfection in the original, such as a blemish or missing page, may be replicated in our edition. We do, however, repair the vast majority of imperfections successfully; any imperfections that remain are intentionally left to preserve the state of such historical works.

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In this book we introduce the basics of the federal budget process, provide an historical background on the foundation and development of the budget process, indicate how defense spending may be measured and how it impacts the economy, describe and analyze how Planning, Programming, Budgeting, and Execution System (PPBES) operates and should function to produce the annual defense budget proposal to Congress, analyze the role of Congress in debating and deciding on defense appropriations and the politics of the budgetary process including the use of supplemental appropriations to fund national defense, analyze budget execution dynamics, identify the principal participants in the defense budget process in the Pentagon and military commands, assess federal and Department of Defense (DoD) financial management and business process challenges and issues, and describe the processes used to resource acquisition of defense war fighting assets, including reforms in acquisition and linkages between PPBES and the defense acquisition process.

Recent audits of the fiscal year 1998 financial statements for DOD and the individual military services, performed by the DOD Inspector General (IG) and the service audit agencies, and our report on the U.S. government's financial statements have highlighted many critical DOD financial management problems. These problems not only hamper the department's ability to produce timely and accurate financial management information, but also significantly impair efforts to improve the economy and efficiency of its operations. Key areas of concern relate to ineffective asset control and accountability, which affects DOD's visibility over weapons systems and inventory, and unreliable cost and budget information, which affects DOD's ability to effectively measure performance, reduce costs, and maintain adequate funds control.