Improving Military Accounting to Support the Military Decision-Making Process

DoDs accounting systems do not adequately document and report financial disbursements and military expenditures. The General Accounting Office and Defense Audit Agencies determined that significant accounting weaknesses exist and contribute to financial mismanagement, fraud, waste, and abuse of public funds. However, with the passage of the Chief Financial Officers Act of 1990, as amended by the Federal Financial Management Act of 1994, there are significant efforts ongoing to regain funds accountability to support our national defense interests and security. The creation of the Defense Finance and Accounting Service and a number of new financial and logistics information systems will provide faster responsiveness and reliability. Perhaps the overriding benefit of improving the military accounting systems is the potential savings that can be obtained and reallocated to readiness accounts from timely and reliable financial analysis. This analysis will determine where cost redundancies exist, identify potential cost overruns, reduce interest penalties to contractors, and signal additional savings in future Base Realignment and Closure Programs. Responsive and reliable accounting measures can identify additional monies for Military Readiness, Force Modernization and Quality of Life Programs. The use of new accounting methods such as Activity Based Accounting will support commanders and leaders to reduce overhead costs.