oversight

DOD Financial Management: Reported Status of Department of Defense's Enterprise Resource Planning Systems

Published by the Government Accountability Office on 2012-03-30.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

United States Government Accountability Office
Washington, DC 20548



           March 30, 2012


           The Honorable Howard P. “Buck” McKeon
           Chairman
           The Honorable Adam Smith
           Ranking Member
           Committee on Armed Services
           House of Representatives

           The Honorable K. Michael Conaway
           House of Representatives

           The Honorable Robert Andrews
           House of Representatives

           Subject: DOD Financial Management: Reported Status of Department of Defense’s
           Enterprise Resource Planning Systems 1

           In October 2010, we reported on the status of the Department of Defense’s (DOD)
           enterprise resource planning (ERP) systems. 2 In that report, we noted that several of
           these systems were not being implemented on schedule and within budget,
           necessitating the extended use and funding of existing, duplicative, stove-piped
           systems. DOD considers the successful implementation of these systems critical to
           transforming its business operations and addressing long-standing weaknesses in
           areas such as financial and supply chain management. DOD officials also stated
           that these systems are critical to ensuring the department meets its mandated
           September 30, 2017, goal to have auditable consolidated financial statements. 3 As
           agreed with your staff, our objective was to provide updated information on DOD’s
           reported status for each of these ERP systems as of December 31, 2011.


           1
            An ERP system is an automated system using commercial off-the-shelf software consisting of
           multiple, integrated functional modules that perform a variety of business-related tasks such as
           general ledger accounting, payroll, and supply chain management.
           2
           GAO, DOD Business Transformation: Improved Management Oversight of Business System
           Modernization Efforts Needed, GAO-11-53 (Washington, D.C.: Oct. 7, 2010).
           3
            See National Defense Authorization Act for Fiscal Year 2010, Pub. L. No. 111-84, div. A, § 1003(a),
           (b), 123 Stat. 2190, 2439-40 (Oct. 28, 2009).


           Page 1                                                    GAO-12-565R DOD Financial Management
To address the objective, we obtained and reviewed data and supporting
documentation on the updated status of each ERP provided by DOD for
completeness and consistency. In certain instances, we compared the information to
what we previously reported in October 2010 4 to identify inconsistencies, if any, and
contacted DOD officials to reconcile any identified discrepancies. We did not validate
the data provided by the department, nor evaluate the implications of any changes in
DOD’s reported status information on its ability to achieve its September 30, 2017,
auditability goal. We conducted our work from December 2011 through March 2012
in accordance with all sections of GAO’s Quality Assurance Framework that are
relevant to our objectives. The framework requires that we plan and perform the
engagement to obtain sufficient and appropriate evidence to meet our stated
objectives and to discuss any limitations in our work. We believe that the information
and data obtained, and the analysis conducted, provide a reasonable basis for any
findings and conclusions in this product.

We requested DOD provide an update as of December 31, 2011, on specific data
elements—such as the current life-cycle cost estimate and the number of system
users—for each ERP system that DOD identified as essential to transforming its
business operations identified in our October 2010 report. 5 A list of the ERPs is
provided in enclosure I and a list of these data elements is included in enclosure II.
DOD’s reported status of each ERP system is provided in enclosure III.

Agency Comments

We requested comments on a draft of this report from DOD. DOD provided technical
comments related to the information provided on the status of each ERP system,
which we considered and incorporated as appropriate.

                                          -----


We are sending copies of this report to the appropriate congressional committees.
We are also sending copies to the Secretary of Defense; the Secretary of the Army;
the Secretary of the Navy; the Secretary of the Air Force; the Deputy Secretary of
Defense; Director, Defense Logistics Agency; the Deputy Chief Management Officer;
the Under Secretary of Defense (Comptroller); the Under Secretary of the Army, the
Under Secretary of the Navy, and the Under Secretary of the Air Force, in their
capacity as the Chief Management Officer of their respective service; and the
program management office for each business system that is included in the report.
This report also is available at no charge on the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact me at (202)
512–9869 or khana@gao.gov. Contact points for our Offices of Congressional


4
GAO-11-53.
5
GAO-11-53.


Page 2                                            GAO-12-565R DOD Financial Management
Relations and Public Affairs may be found on the last page of this report. GAO staff
who made key contributions to this report are listed in enclosure IV.




Asif A. Khan
Director, Financial Management and Assurance

Enclosures - 4




Page 3                                          GAO-12-565R DOD Financial Management
Enclosure I

We obtained DOD’s reported status as of December 31, 2011, for the following
ERPs.

Army
General Fund Enterprise Business System (GFEBS)
Global Combat Support System-Army (GCSS-Army)
Logistics Modernization Program (LMP)
Integrated Personnel and Pay System-Army (IPPS-A)

Navy
Navy Enterprise Resource Planning System (Navy ERP)
Global Combat Support System-Marine Corps (GCSS-MC)
Integrated Pay and Personnel System-Navy (IPPS-Navy)

Air Force
Defense Enterprise Accounting and Management System (DEAMS)
Expeditionary Combat Support System (ECSS)
Air Force-Integrated Personnel and Pay System (AF-IPPS)

Defense Logistics Agency (DLA)
Defense Agencies Initiative (DAI)
Enterprise Business System (EBS)1




1
 We did not include information on the DLA’s EBS in this report. According to DLA officials, this ERP
system was fully deployed to over 15,000 system users in July 2007 and is in sustainment.


Page 4                                                    GAO-12-565R DOD Financial Management
Enclosure II

The following is a list of the specific data elements that we requested DOD provide
an updated status as of December 31, 2011, for each of the ERPs.

    •   program owner;
    •   a description of the functionality that each system is intended to provide;
    •   the annual dollar value that each system is intended to control and for which it
        is intended to account;
    •   the date that each program was initiated;
    •   the originally scheduled date for the full deployment of each system; 1
    •   the actual (or most recently estimated) scheduled date for the full deployment
        of each system and the reasons for any reported schedule slippage;
    •   the original life-cycle cost estimate for each system; 2
    •   the current life-cycle cost estimate for each system and the reasons for any
        reported life-cycle cost increases;
    •   the reported amount expended for each system;
    •   the reported number of system users for each system as of December 31,
        2011, and the expected number of users for each system when fully
        deployed;
    •   the reported number of locations in which each system operates as of
        December 31, 2011, and expected number of locations in which each system
        will operate when fully deployed;
    •   the reported number of legacy systems to be replaced by each system;
    •   the reported annual cost to operate and maintain the legacy systems to be
        replaced by the ERPs; and
    •   the reported number of system interfaces. 3




1
 With respect to the acquisition of a large information system like an ERP, full deployment means the
fielding of an increment of the program in accordance with the terms of a full deployment decision—
the final decision authorizing an increment of the program to deploy software for operational use. The
National Defense Authorization Act for Fiscal Year 2010, Pub. L. No. 111-84, div. A, § 841, 123 Stat.
2190, 2418 (Oct. 28, 2009), directed that the terminology be changed from full operational capability
to full deployment.
2
 A life-cycle cost estimate provides an accounting of all resources and associated cost elements
required to develop, produce, deploy, and sustain a particular program. The life-cycle cost estimate
encompasses all past, present, and future costs for every aspect of the program, regardless of
funding source.
3
 An interface is a connection between two devices, applications, or networks or a boundary across
which two systems communicate.


Page 5                                                    GAO-12-565R DOD Financial Management
                                       Enclosure III

                                       General Fund Enterprise Business System
                                       (GFEBS)


                                       DOD’s Reported Status as of December 31, 2011
Program Owner                          Program timeline
Assistant Secretary for Financial      •   Initiation date                                                         October 2004
                                                                                                                                   a
                                                                                                                                a
Management and Comptroller,            •   Original scheduled date of full deployment                           Fiscal year 2011
                                                                                                                                b
Army                                   •   Current scheduled date of full deployment                                   July 2012
                                       Program costs
                                                                                                                                   a
                                       •   Original life-cycle cost estimate                                         $1.4 billion
Functionality                          •   Current life-cycle cost estimate                                           $1.4 billion
GFEBS is intended to provide a         •   Amount expended                                                          $764 million
                                                                                                                                  c

transaction-driven General             Program deployment details
Ledger for the Army’s general          •   Current number of system users                                                 38,050
                                                                                                                               d
fund; 1 prevalidation of obligations   •   Expected number of system users at full                                       52,000
                                           deployment
prior to disbursement; financial
management capabilities such as        •      Current number of locations using system                                        180
online analysis and real-time          •      Expected number of locations at full deployment                                 227
ad hoc reporting functionality; and
an automated audit trail to trace      •      Legacy systems to be replaced                                                 107
all transactions to their sources.     •      Annual cost of legacy systems                                           $58 million
GFEBS will support all                 •   Number of system interfaces                                                  46
components of the Army—Active,         Source: DOD’s GFEBS Program Management Office and historical data as reported in
Reserve, and National Guard.           GAO-11-53.

Annual Dollar Value Intended           Note: These data have not been validated.
to Control and Account                 a
                                           As previously reported by DOD and described in GAO-11-53.
On an annual basis, GFEBS will         b
be used to manage about $140            According to program officials, the schedule slippage was due to changes in the
                                       functional design, Logistics Modernization Program delays, natural disasters in Haiti and
billion of obligation authority.       Japan, and the reorganization of several Army Commands and Districts.
                                       c
                                       Data as of September 30, 2011.
                                       d
                                        According to program officials, upon full deployment of GFEBS, there will be
                                       approximately 15,000-18,000 additional budget planning and execution reporting users.




                                       1
                                        According to the GFEBS program officials, the Army Corps of Engineers will continue to
                                       use its existing financial system, the Corps of Engineers Financial Management System;
                                       but once GFEBS is fully operational, the Army will assess the feasibility of GFEBS
                                       becoming the system of record for the Corps of Engineers.

Page 6                                                                         GAO-12-565R DOD Financial Management
                                       Enclosure III

                                       Global Combat Support System-Army
                                       (GCSS-Army)


                                       DOD’s Reported Status as of December 31, 2011
Program Owner                          Program timeline
Deputy Chief of Staff for              •   Initiation date                                                        December 2003
Logistics, Army                        •   Original scheduled date of full deployment              Fourth quarter fiscal year 2015
                                                                                                                                 a
                                       •   Current scheduled date of full deployment              Fourth quarter fiscal year 2017
                                       Program costs
Functionality                                                                                                                      b
                                       •   Original life-cycle cost estimate                                          $3.9 billion
GCSS-Army is intended to               •   Current life-cycle cost estimate                                           $4.2 billion
                                                                                                                                  a

provide the capability to track        •   Amount expended                                                           $891 million
                                                                                                                                   c

supplies, spare parts, and             Program deployment details
organizational equipment. It is to     •   Current number of system users                                                     689
be used to track unit                  •   Expected number of system users at full                                        168,000
                                           deployment
maintenance, total cost of
ownership, and other financial         •      Current number of locations using system                                           2
transactions related to logistics      •      Expected number of locations at full deployment                                  379
for all Army units. The system is
intended to provide asset visibility   •      Legacy systems to be replaced                                                      5
for accountable items.                 •      Annual cost of legacy systems                                            $92 million

                                       •   Number of system interfaces                                               167
Annual Dollar Value Intended           Source: DOD’s GCSS-Army Program Management Office and historical data as reported
to Control and Account                 in GAO-11-53.
On an annual basis, GCSS-Army
is intended to be used to manage       Note: These data have not been validated.
$216 billion in assets.                a
                                         According to program officials, the estimated date of full deployment was extended to
                                       accommodate a change in scope to include both tactical and installation units to support
                                       the Army’s statutory requirement for auditability. The change in scope resulted in a 2-year
                                       slip in the estimated full deployment date and an approximate $200 million increase in the
                                       life-cycle cost estimate.
                                       b
                                           As previously reported by DOD and described in GAO-11-53.
                                       c
                                       Data as of September 30, 2011.




Page 7                                                                         GAO-12-565R DOD Financial Management
                                         Enclosure III

                                         Logistics Modernization Program
                                         (LMP)


                                         DOD’s Reported Status as of December 31, 2011
Program Owner                            Program timeline
Program Executive Office,                •   Initiation date                                                        December 1999
                                                                                                                                   a
Enterprise Information Systems,          •   Original scheduled date of full deployment                            Fiscal year 2005
                                                                                                                                    b
Army                                     •   Current scheduled date of full deployment                             December 2011
                                         Program costs
                                                                                                                                       a
                                         •   Original life-cycle cost estimate                                           $2.6 billion
Functionality                            •   Current life-cycle cost estimate                                            $4.2 billion
                                                                                                                                      c

LMP is intended to provide a             •   Amount expended                                                              $1.6 billion
solution that streamlines the            Program deployment details
maintenance, repair, and overhaul;       •   Current number of system users                                                   20,235
                                                                                                                                   d
planning; finance; acquisition; and      •   Expected number of system users at full                                         20,235
supply of weapon systems, spare              deployment
parts, services, and material for the
                                         •      Current number of locations using system                                              50
Army’s working capital fund. LMP
                                         •      Expected number of locations at full deployment                                       50
is to enable worldwide, real-time,
total asset visibility of inventory,     •      Legacy systems to be replaced                                                       2
including contractor-managed             •      Annual cost of legacy systems                                             $25 million
inventories. It is intended to provide
an anticipatory logistics planning       •   Number of system interfaces                                                              70
tool that should result in reduced       Source: DOD’s LMP Program Management Office and historical data as reported in
stock levels.                            GAO-11-53.

                                         Note: These data have not been validated.
Annual Dollar Value Intended
to Control and Account                   a
                                             As previously reported by DOD and described in GAO-11-53.
On an annual basis, LMP is               b
                                          Program officials stated that as of October 2010, LMP Increment 1 was fully deployed
intended to manage $22 billion in
                                         and in December 2011, the program was approved to transition to sustainment. Program
inventory.                               officials also stated that in December 2011, the program was approved to proceed with
                                         the prototyping phase for Increment 2 which is intended to deliver expanded logistics
                                         capability. Program officials further stated that the program’s Increment 1 deployment
                                         schedule had been delayed because the size, scope, and complexity of the effort were
                                         initially underestimated. In 2005, the Army directed a strategic pause and, in 2006,
                                         restructured the contract to reflect the current schedule.
                                         c
                                          According to program officials, the current life-cycle cost estimate covers a 27-year
                                         period, whereas the original life-cycle cost estimate covered a 10-year period. Program
                                         officials added that the current life-cycle cost estimate is for Increments 1 and 2. There
                                         were also increased costs associated with the LMP contract renewal that transitioned
                                         intellectual property rights, system sustainment, and infrastructure support from the
                                         contractor to the government.
                                         d
                                          According to program officials, the expected number of system users at full deployment
                                         is for Increment 1 only.




Page 8                                                                           GAO-12-565R DOD Financial Management
                                   Enclosure III

                                   Integrated Personnel and Pay System-Army
                                   (IPPS-A) 1


                                   DOD’s Reported Status as of December 31, 2011
Program Owner                      Program timeline
Technology and Business            •   Initiation date                                                              September 2009
                                                                                                                                            a

Architecture Integration           •   Original scheduled date of full deployment                      Fourth quarter fiscal year 2014
                                                                                                                                     b
Directorate, Army                  •   Current scheduled date of full deployment                                    Fiscal year 2017
                                   Program costs
                                                                                                                                            c
                                   •   Original life-cycle cost estimate                                                   $344 million
Functionality                      •   Current life-cycle cost estimate                                                    $344 million
                                                                                                                                       c

IPPS-A is intended to provide a    •   Amount expended                                                                       $66 million
24-hour, web-based, integrated     Program deployment details
human resources system to          •   Current number of system users                                                                  0
soldiers, human resource           •   Expected number of system users at full                                            Over 1 million
                                       deployment
professionals, combatant
commanders, personnel and pay      •      Current number of locations using system                                                    0
managers, and other authorized     •      Expected number of locations at full deployment                        Worldwide availability
Army users. IPPS-A is designed
to serve all components of the     •      Legacy systems to be replaced                                                                56
Army—Active, Reserve, and          •      Annual cost of legacy systems                                                       $39 million
National Guard.                    •   Number of system interfaces                                                   14
                                                                                                                                            d

                                   Source: DOD’s IPPS-A Project Management Office and historical data as reported in
Annual Dollar Value Intended       GAO-11-53.
to Control and Account
On an annual basis, IPPS-A is      Note: These data have not been validated.
intended to control and account    a
                                       As previously reported by DOD and described in GAO-11-53.
for approximately $60 billion in
base pay and $8 billion in         b
                                    According to program officials, the current scheduled date of full deployment slipped due
overseas contingency operations    to a change in the Army’s implementation strategy from a “Big Bang” implementation
                                   approach to an incremental development and implementation approach. IPPS-A is
pay.
                                   currently being developed and implemented in two increments with multiple releases.
                                   c
                                    According to program officials, the original and current life-cycle cost estimates are for
                                   the first of two increments. The cost for the second increment has not yet been
                                   determined.
                                   d
                                    According to program officials, this number is for Increment I and system analysis is
                                   ongoing.




                                   1
                                    Originally, the IPPS-A was a part of the Defense Integrated Military Human Resources System
                                   (DIMHRS) and was intended to provide a joint, integrated, standardized personnel and pay system
                                   for all military personnel departmentwide. Each military service is now responsible for developing its
                                   own integrated personnel and pay system.

Page 9                                                                         GAO-12-565R DOD Financial Management
                                           Enclosure III

                                           Navy Enterprise Resource Planning System
                                           (Navy ERP)


                                           DOD’s Reported Status as of December 31, 2011
Program Owner                              Program timeline
Assistant Secretary for Research,          •   Initiation date                                                               July 2003
                                                                                                                                          a

Development, and Acquisition, Navy         •   Original scheduled date of full deployment                             Fiscal year 2011
                                                                                                                                      b
                                                                                                                                       c
                                           •   Current scheduled date of full deployment                                  August 2013
Functionality                              Program costs
The Navy ERP is intended to                •   Original life-cycle cost estimate                                          $1.9 billion
                                                                                                                                        b,d
                                                                                                                                       e
standardize the acquisition, financial,    •   Current life-cycle cost estimate                                            $2.7 billion
program management, maintenance,           •   Amount expended                                                              $1.3 billion
procurement, plant and wholesale           Program deployment details
supply, and workforce management           •   Current number of system users                                    Approximately 66,000
capabilities of the Navy. Specific         •   Expected number of system users at full                           Approximately 71,000
capabilities to be provided by the             deployment
Navy ERP include:
                                           •      Current number of locations using system                                           79
• financial accounting and fund
                                           •      Expected number of locations at full deployment                                   111
    management;
• asset management to provide for          •      Legacy systems to be replaced                                                      96
    the acquisition, custody, tracking,    •      Annual cost of legacy systems                                            $103 million
    depreciation, and disposition of
    Navy assets;                           •      Number of system interfaces                                                           48
• acquisition and program                  Source: DOD’s Navy ERP Program Management Office and historical data as reported in
    management for project                 GAO-11-53.
    planning, structure, execution,
    monitoring, and control;               Note: These data have not been validated.
• workforce management to
    provide a single system for the        a
                                            According to program officials, the Navy ERP initiation date is August 2004. Program
    civilian, military, and contractor     officials further stated that the July 2003 initiation date reported in GAO-11-53 represents
    workforces;                            the date that the Navy ERP program received its acquisition category designation.
• procurement automation of                b
    commitments and obligations;               As previously reported by DOD and described in GAO-11-53.
    and                                    c
• wholesale and retail supply               According to program officials, the Navy ERP’s current scheduled date of full deployment
    solution with total asset visibility   slipped two years as a result of 2005 Base Realignment and Closure recommendations
                                           that realigned and merged depot and intermediate maintenance activities, causing a
    for improved forecasting and
                                           reorganization of the Navy’s maintenance community in 2006.
    utilization of materials.
                                           d
                                            According to program officials, this life-cycle cost estimate was later revised in August
Annual Dollar Value Intended               2004 to $2.0 billion.
to Control and Account
On an annual basis, the Navy ERP is        e
                                            According to program officials, Navy ERP’s current life-cycle cost estimate increased
intended to control and account for        due to (1) the 2 year schedule slippage; (2) an increase in demand for on-site support
$82.5 billion of total appropriations;     and stabilization activities; and (3) the addition of new compliance requirements, such as
$33.8 billion of total inventory; and      evolving business enterprise architecture requirements.
$1.1 billion of plant, property, and
equipment.




Page 10                                                                            GAO-12-565R DOD Financial Management
                                     Enclosure III

                                     Global Combat Support System-Marine Corps
                                     (GCSS-MC)


                                     DOD’s Reported Status as of December 31, 2011
Program Owner                        Program timeline
Assistant Secretary for Research,    •   Initiation date                                                        September 2003
                                                                                                                                a
Development, and Acquisition,        •   Original scheduled date of full deployment                            November 2009
                                                                                                                               b
Navy                                 •   Current scheduled date of full deployment                           Not yet determined
                                     Program costs
                                                                                                                                  a,c
                                     •   Original life-cycle cost estimate                                         $126 million
Functionality                        •   Current life-cycle cost estimate                                            $1.1 billion
                                                                                                                                 d

GCSS-MC is intended to provide       •   Amount expended                                                             $466 million
the deployed warfighter with         Program deployment details
enhanced capabilities in the         •   Current number of system users                                    Approximately 18,000
areas of warehousing,                •   Expected number of system users at full                                         33,000
                                         deployment
distribution, logistical planning,
depot maintenance, and               •      Current number of locations using system                                               5
improved asset visibility.           •      Expected number of locations at full deployment                                        6

Annual Dollar Value Intended         •      Legacy systems to be replaced                                                        4
to Control and Account               •      Annual cost of legacy systems                                             $4.5 million
Program officials stated that        •   Number of system interfaces                                                37
GCSS-MC is not the Marine            Source: DOD’s GCSS-MC Program Management Office and historical data as reported in
Corps’ official financial system     GAO-11-53.
and as such does not control
financial transactions.              Note: These data have not been validated.
                                     a
                                         As previously reported by DOD and described in GAO-11-53.
                                     b
                                      The program manager stated that the current scheduled date of full deployment will not
                                     be determined until the planned full deployment decision—the final decision made by
                                     DOD officials to authorize an increment of the program to deploy software for operational
                                     use—in December 2012.
                                     c
                                      According to program officials, the original life-cycle cost estimate was revised in 2010
                                     and updated to $1.0 billion.
                                     d
                                      The program manager stated that the current life-cycle cost estimate for GCSS-MC
                                     consists of Increment 1 only. The increase in the life-cycle cost estimate is primarily
                                     attributed to the difficulty of developing a technical solution for GCSS-MC use in a
                                     deployed environment and changes in DOD logistics policies that resulted in fielding
                                     additional requirements.




Page 11                                                                      GAO-12-565R DOD Financial Management
                                       Enclosure III

                                       Integrated Personnel and Pay System-Navy
                                       (IPPS-Navy) 1


                                       DOD’s Reported Status as of December 31, 2011
Program Owner                          Program timeline
Chief of Naval Operations, Navy        •   Initiation date                                                               September 2009
                                                                                                                                                a
                                                                                                                                         a
                                       •   Original scheduled date of full deployment                                    Fiscal year 2017
Functionality                          •   Current scheduled date of full deployment                                   Not yet determined
                                                                                                                                          b

IPPS-Navy is intended to provide       Program costs
                                                                                                                                                a
an integrated personnel and pay        •   Original life-cycle cost estimate                                                   $1.3 billion
                                                                                                                                            b
system for the Navy.                   •   Current life-cycle cost estimate                                            Not yet determined
                                                                                                                                            b
                                       •   Amount expended                                                             Not yet determined
                                       Program deployment details
Annual Dollar Value Intended           •   Current number of system users                                              Not yet determined
                                                                                                                                                b

to Control and Account                 •   Expected number of system users at full                                     Not yet determined
                                                                                                                                         b

Program officials did not provide          deployment
the annual dollar value the system
                                                                                                                                                b
is intended to control and for which   •      Current number of locations using system                                 Not yet determined
                                                                                                                                         b
it is intended to account.             •      Expected number of locations at full deployment                          Not yet determined
                                                                                                                                                b
                                       •      Legacy systems to be replaced                                            Not yet determined
                                                                                                                                         b
                                       •      Annual cost of legacy systems                                            Not yet determined
                                                                                                                                                b
                                       •   Number of system interfaces                                Not yet determined
                                       Source: DOD’s IPPS-Navy Program Management Office and historical data as reported
                                       in GAO-11-53.

                                       Note: These data have not been validated.
                                       a
                                           As previously reported by DOD and described in GAO-11-53.
                                       b
                                        According to Navy Deputy Chief Management Office (DCMO) officials, this program is
                                       still working on refining its initial system solution and creating a strategy for acquiring the
                                       solution. According to Navy DCMO officials, IPPS-Navy is currently conducting business
                                       process reengineering efforts and has not yet been authorized to proceed with the
                                       planning and development of the system technology.




                                       1
                                         Originally, IPPS-Navy was a part of the Defense Integrated Military Human Resources System
                                       (DIMHRS) and was intended to provide a joint, integrated, standardized personnel and pay system
                                       for all military personnel departmentwide. Each military service is now responsible for developing its
                                       own integrated personnel and pay system.

Page 12                                                                            GAO-12-565R DOD Financial Management
                                      Enclosure III

                                      Defense Enterprise Accounting and
                                      Management System
                                      (DEAMS)

                                      DOD’s Reported Status as of December 31, 2011
Program Owner                         Program timeline
Assistant Secretary for Financial     •   Initiation date                                                           August 2003
                                                                                                                                a
Management and Comptroller, Air       •   Original scheduled date of full deployment                           Fiscal year 2014
                                                                                                                                b
Force                                 •   Current scheduled date of full deployment              Fourth quarter fiscal year 2016
                                      Program Costs
                                                                                                                                    a
                                      •   Original life-cycle cost estimate                                           $1.1 billion
Functionality                                                                                                                      c
                                      •   Current life-cycle cost estimate                                            $1.6 billion
DEAMS is intended to provide the                                                                                      $334 million
                                      •   Amount expended
entire spectrum of financial          Program deployment details
management capabilities,              •   Current number of system users                                                    1,053
including collections,                •   Expected number of system users at full                                          30,000
commitments and obligations,              deployment
cost accounting, general ledger,
                                      •      Current number of locations using system                                            2
funds control, receipts and                                                                                                    170
                                      •      Expected number of locations at full deployment
acceptance, accounts payable
and disbursement, billing, and        •      Legacy systems to be replaced                                                       8
financial reporting for the general   •      Annual cost of legacy systems                                             $56 million
fund.
                                      •   Number of system interfaces                                                  84
                                      Source: DOD’s DEAMS Program Management Office and historical data as reported in
Annual Dollar Value Intended          GAO-11-53.
to Control and Account
On an annual basis, DEAMS is          Note: These data have not been validated.
intended to control and account       a
                                          As previously reported by DOD and described in GAO-11-53.
for $148 billion in spending.
                                      b
                                       According to program officials, data is for increment 1 only. They further stated that
                                      schedule delays have resulted from the complexity of reengineering business processes;
                                      and designing, developing, and testing reports, interfaces, conversions, extensions, and
                                      workflow (RICEW) objects.
                                      c
                                       According to program officials, data is for increment 1 only. They further stated that the
                                      increase in the life-cycle cost estimate was primarily due to schedule changes. The
                                      estimate also increased due to evolving technical requirements. Other factors that
                                      affected the cost estimate were changes in (1) the methodology used for estimating
                                      software development of RICEW objects; (2) the approach for design, development, and
                                      operations and support; and (3) the pricing methodology and rates used to determine
                                      Defense Information Systems Agency related costs.




Page 13                                                                       GAO-12-565R DOD Financial Management
                                      Enclosure III

                                      Expeditionary Combat Support System (ECSS)


                                      DOD’s Reported Status as of December 31, 2011
                                      Program timeline
Program Owner                         •   Initiation date                                                            January 2004
                                                                                                                                 a
                                      •   Original scheduled date of full deployment                             Fiscal year 2012
Deputy Chief of Staff for                                                                                                         b
                                      •   Current scheduled date of full deployment                              September 2017
Logistics, Installation, and
                                      Program costs
Mission Support Headquarters,         •   Original life-cycle cost estimate                                              $3 billion
Air Force                             •   Current life-cycle cost estimate                                             $5.2 billion
                                                                                                                                   b

                                      •   Amount expended                                                              $899 million
Functionality                         Program deployment details
ECSS is intended to provide           •   Current number of system users                                                       225
                                      •   Expected number of system users at full                                          250,000
capabilities in the areas of
                                          deployment
product support and engineering;
supply chain management;              •      Current number of locations using system                                             6
expeditionary logistics command       •      Expected number of locations at full deployment                                    186
and control; acquisition and
procurement; and maintenance,         •      Legacy systems to be replaced                                                    240
                                      •      Annual cost of legacy systems                                             $325 million
repair, and overhaul.
                                      •   Number of system interfaces                                                 564
Annual Dollar Value Intended          Source: DOD’s ECSS Program Management Office and historical data as reported in
to Control and Account                GAO-11-53.
On an annual basis, ECSS is
                                      Note: These data have not been validated.
intended to control and account
for (1) $13 billion of working        a
                                          As previously reported by DOD and described in GAO-11-53.
capital fund budgetary authority, 1
                                      b
and (2) approximately $33 billion      According to program officials, schedule delays have resulted from program
of general fund budgetary             restructuring, changes in leadership, and other factors. Further, officials indicated that the
                                      increase in the life-cycle cost estimate is based on gaining a more detailed understanding
authority 2 for logistics.            of the program in areas such as data cleansing, reports, interfaces, conversions,
                                      extensions, and fielding.




                                      1
                                       The working capital fund can be defined as an intragovernmental revolving fund that
                                      operates as a self-supporting entity that conducts a regular cycle of business-like
                                      activities. These funds function entirely from the fees charged for the services they
                                      provide consistent with their statutory authority.
                                      2
                                       The general fund can be defined as the fund into which receipts are deposited, except
                                      those from specific sources required by law to be deposited into other designated funds
                                      and from which appropriations are made by Congress to carry on the general and
                                      ordinary operations of the government.

Page 14                                                                       GAO-12-565R DOD Financial Management
                                     Enclosure III

                                     Air Force - Integrated Personnel and Pay
                                     System (AF-IPPS) 1


                                     DOD’s Reported Status as of December 31, 2011
Program Owner                        Program timeline
Program Executive Office and         •   Initiation date                                                               September 2009
                                                                                                                                       a
Service Acquisition Executive, Air   •   Original scheduled date of full deployment                                          April 2018
Force                                •   Current scheduled date of full deployment                       Fourth quarter fiscal year 2016
                                     Program costs
                                     •   Original life-cycle cost estimate                                                      $1.7 billion
Functionality
                                     •   Current life-cycle cost estimate                                                       $1.7 billion
The AF-IPPS is intended to           •   Amount expended                                                                        $46 million
provide a comprehensive, web-        Program deployment details
based solution to integrate many     •   Current number of system users                                                              0
existing personnel and pay           •   Expected number of system users at full                                 Approximately 550,000
processes into one self-service          deployment
system. It is intended to support                                                                                                         0
                                     •      Current number of locations using system
the Active, Reserve, and Air         •      Expected number of locations at full deployment                                             150
National Guard components.
                                     •      Legacy systems to be replaced                                                               31
                                     •      Annual cost of legacy systems                                                     $120 million
Annual Dollar Value Intended
                                     •   Number of system interfaces                                                 148
to Control and Account               Source: DOD’s AF-IPPS Program Management Office and historical data as reported in
On an annual basis, AF-IPPS is       GAO-11-53.
intended to execute, track, and
report on the disbursement of        Note: These data have not been validated.
funds related to compensating        a
                                         As previously reported by DOD and described in GAO-11-53.
Active, Reserve, and Air National
Guard service members in the
following amounts:
• Active - $29.5 billion
• Reserve - $1.7 billion
• Air National Guard - $3.1
     billion




                                     1
                                      Originally, the AF-IPPS was a part of the Defense Integrated Military Human Resources System
                                     (DIMHRS) and was intended to provide a joint, integrated, standardized personnel and pay system
                                     for all military personnel departmentwide. Each military service is now responsible for developing its
                                     own integrated personnel and pay system.

Page 15                                                                          GAO-12-565R DOD Financial Management
                                     Enclosure III

                                     Defense Agencies Initiative
                                     (DAI)


                                     DOD’s Reported Status as of December 31, 2011
Program Owner                        Program timeline
Defense Logistics Agency             •   Initiation date                                                          January 2007
                                                                                                                              a
                                     •   Original scheduled date of full deployment                           Fiscal year 2012
                                                                                                                               b
Functionality                        •   Current scheduled date of full deployment                            September 2016
                                     Program costs
The DAI system is intended to                                                                                                     a
                                     •   Original life-cycle cost estimate                                        $209 million
modernize the defense agencies’      •   Current life-cycle cost estimate                                  Not yet determined
                                                                                                                              b

financial management processes       •   Amount expended                                                           $193 million
by streamlining financial            Program deployment details
management capabilities and          •   Current number of system users                                    Approximately 8,000
transforming the budget, finance,    •   Expected number of system users at full                                       93,980
                                         deployment
and accounting operations. When
DAI is fully implemented, it is      •      Current number of locations using system                                         10
expected to have the capability to   •      Expected number of locations at full deployment                                  29
control and account for all
appropriated working capital and     •      Legacy systems to be replaced                                                     15
revolving funds at the defense       •      Annual cost of legacy systems                                            $35 million
agencies implementing the            •      Number of system interfaces                                                      36
system.
                                     Source: DOD’s DAI Program Management Office and historical data as reported in
                                     GAO-11-53.
Annual Dollar Value Intended
to Control and Account               Note: These data have not been validated.
Program officials did not provide    a
                                         As previously reported by DOD and described in GAO-11-53.
the dollar value that DAI is
intended to control and account      b
                                      DAI program officials did not provide a reason for the slippage in full deployment dates.
for on an annual basis.              Further, according to program officials, as of December 2011, the life-cycle cost estimate
                                     for DAI had not been finalized.




Page 16                                                                      GAO-12-565R DOD Financial Management
Enclosure IV


                   GAO Contact and Staff Acknowledgments


GAO Contact

Asif A. Khan, (202) 512-9869 or khana@gao.gov

Staff Acknowledgments

In addition to the contact named above, Cynthia Jackson, Assistant Director;
Michael LaForge, Assistant Director; Beatrice Alff; Bruce David; LaTasha Freeman;
Patrick Frey; and James Kernen made key contributions to this report.




(197114)



Page 17                                        GAO-12-565R DOD Financial Management
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