Army ERP System Enables Financial Transparency

Antiquated systems have made it impossible for the Army to audit its finances. A new ERP coming online will help solve that problem.

April 15, 2014

4 Min Read

For the first time in its history, the US Army can finally audit its finances with the help of enterprise resource management software tools. Replacing a number of stovepiped management platforms, the new ERP tools, which are still being deployed, will allow the service to meet Department of Defense auditing compliance goals. Full auditability not only helps the Army save money, it makes the service's financial workings more transparent to federal scrutiny, service officials said.

The Army's efforts to shed light on its books are part of a broader program to make the military's finances more accountable. The Defense Department remains the only cabinet-level agency that can't run a full audit of its activities, said Kristyn Jones, deputy assistant secretary of the Army for financial information management at a recent briefing meeting with industry executives, held by the Armed Forces Communications and Electronics Association.

To achieve its part of the federally mandated auditability goals for the DOD, the Army launched its General Fund Enterprise Business System in 2012. The SAP-based system allows the service to manage its financial and procurement processes. Since the ERP's launch, Jones said, the Army has successfully undergone several audits by outside auditing firms focusing on its financial resources and asset inventories.

[Want to learn how DOD is trying to streamline its IT operations? Read: DOD Pushes Toward Joint Information Environment.]

As it continues its rollout across the service, GFEBS replaces a number of legacy auditing systems, some of which are 40 years old, Army officials said. However, many of these older systems won't be completely phased out until 2018, they said.

Another ERP system employed by the Army is the Global Combat Support System-Army, a logistics management system that has a major financial component, Jones said. About 20% of the Army uses GCSS-A and it will soon be used by the Army National Guard, she added.

Using these existing systems as a base, the Army continues to evolve its ERP systems to meet its own and the DOD's goals, Jones said. These efforts will help the Army meet its first milestone this June, when the DOD must pass a small-scale budgetary review. The second and most important target is in 2017, when the Army must provide accountability for all of its general financial statements as part of a major DOD-wide audit. Jones noted that for nearly 240 years the Army has never been able to accurately audit its finances and now it can. "To me that's a pretty big deal," she said.

Increased collaboration between the Army's accounting and technology sectors remains a key part of this effort because almost all of the service's financial goals have an IT component, Jones said. This includes processes, procedures, and documentation where Army finance and IT staff work together, or where the service's IT community leads the effort. "IT is important because it helps shape and mold business processes," she said.

Among the military services, the Army is unique in its sole reliance on ERP systems to achieve auditability. By comparison, Jones said, most of the other services rely on legacy systems and procedures to reach their auditability goals. This ERP-based approach will affect all future Army IT programs. Jones noted that all new IT programs must be auditable via ERP immediately at launch. "If they're not auditable, we're not auditable," she said.

ERP software also changes the way the Army thinks about data, which has many implications, Jones said. Legacy systems could not manipulate data in the same way new software can. If a particular data outlay was needed, it had to be worked into the available fields in a legacy system. As a result, she said the service had no "apples to apples" comparisons for spending on specific programs, but a mix of differing data types in the same system.

With the new ERPs, the Army can efficiently manage different data elements in a single system. If the service can do this effectively, then it can rely on its systems for accurate reporting, Jones said. But to have accurate and timely data at decision maker's fingertips, the service's financial and IT communities need to work together, she added.

Business intelligence plays a key role in meeting the Army's goal, Jones said. Although major concerns remain about operational readiness issues, civilian furloughs, and force-structure changes, she noted that Army leadership is most concerned about where it needs to spend its money. The ERPs also help avoid the "salami slicing" of the budget-cutting process because they allow the Army to look clearly at its investments to determine where it gets the most bang for the buck. "We have the information to make smarter decisions, if we can leverage the capabilities in our ERPs," Jones said.

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