The Defense Department reports that a shortage of spare parts has caused a decline in military readiness. Yet because of incomplete financial data, auditors could not determine how much of the $1.1 billion appropriated for spare parts was actually spent for that purpose.

According to a General Accounting Office report issued in June, DOD allocated 92 percent of the money for spare parts into the military services’ operation and maintenance account.

However, DOD’s financial management system "does not show the extent to which this funding was used for spare parts," according to the report.

Once the funds are in those accounts, DOD does not routinely track the amount of funds used for spare parts. "They could have been used for a variety of purposes, including spare parts," the GAO report said.

The report shows the importance of having good financial records, said Greg Kutz, GAO’s director of financial management and assurance. There is a lot of concern about giving an organization money if they don’t know where they are spending it.

Federal Computer Week

-- Anonymous, July 10, 2001

Answers

US DOD: DoD News Briefing

For fiscal year 2000, DoD failed to meet the requirements of the Chief Financial Officer's Act which mandates annual auditable financial statements DoD-wide, even though some units do have clean opinions, and full compliance with the act remains over the horizon for the present.

. . .

Now, causes. DoD's financial infrastructure was not set up to run an enterprise of remotely this complexity. DoD's financial architecture essentially consists of numerous feeder systems which feed information up to core accounting systems. They were originally designed to perform purposes in the stovepipes or areas in which they were set up, they were not designed to speak to the systems higher up. So what you have is, in a way, if you think of the kid's game of "whisper down the valley," where inevitably things become distorted as they go further down the chain.

Northern Light

-- Anonymous, July 12, 2001