DoD to use lessons of Y2K in financial management

The Pentagon is deploying the same strategy it used to squash the Y2K bug to tackle its notorious accounting problems, officials said at a hearing Tuesday.

Rep. Stephen Horn, R-Calif., chairman of the House Government Reform Subcommittee on Government Management, Information and Technology called the hearing to keep pressure on the Defense Department to turn around its tangled financial and accounting systems.

"Similar to the efforts associated with the potential January 1, 2000 computer problems, this process provides for overseeing and monitoring progress on actions needed to better ensure that both financial and feeder systems meet federal financial management requirements," said William Lynn, DoD's chief financial officer.

Robert J. Lieberman, DoD's assistant inspector general, told the subcommittee that the scope and complexity of problems with DoD's financial systems is unparalleled. "Suffice it to say that my department issued 36 reports over the last 12 months about this and I believe one of them was good news," he said.

Lynn said DoD knows DoD's financial systems can't be overhauled overnight, but emphasized that senior department leaders are committed to fixing them eventually. The Y2K-like plan is designed to improve and replace the department's financial and feeder systems. Feeder systems pass along information to accounting systems and include computers with personnel, acquisition, medical and logistics data. At DoD, feeder computers contain 80 percent of the data necessary to make financial reports.

The patchwork of computers that feed data into DoD's financial and accounting systems have individual weaknesses and collectively, "they just don't get the job done," said Jeffrey C. Steinhoff, a General Accounting Office auditor.

DoD's latest financial management improvement plan includes five phases for identifying weak systems, correcting or replacing them and confirming that new systems are in line with federal standards. Lynn will chair an oversight committee charged with making sure the plan stays on track. While each defense agency is responsible for executing the five phases, they will have to get approval from the oversight body after completing each phase before they can move on, he said.