DOD Blows $2.7 Bil On Faulty “Cost-Cutting” System

In a reprehensible example of how the government wastes taxpayer money, the Pentagon has blown several billion dollars on faulty software that was supposed to help cut costs by updating antiquated financial ledgers that create serious management weaknesses.

Instead nearly $2.7 billion have essentially gone down the drain for a program that doesn’t work. The goal is to modernize the Department of Defense’s (DOD) financial ledgers, which are currently hand written and primitive, in order to meet an upcoming deadline requiring the production of financial statements that are actually auditable. This would be a first for the DOD, one of the world’s largest and most complex organizations with an annual budget of $671 billion.

But the fancy software, years in the making, is so defective that it can’t generate auditable financial reports and even produces inaccurate data. As a result, “manual workarounds” are necessary, according to a federal audit released a few days ago. The issues were first discovered when the Army and Air Force tested the new system and found problems in a variety of areas, including data quality and conversions and system interfaces.

Furthermore, the Army found that two-thirds its financial data still needs to be entered manually into the software, according to the audit, which was conducted by the investigative arm of Congress, the Government Accountability Office (GAO). The Air Force found that “substantial manual intervention is required on a daily basis” and that reports produced by the new system were “inaccurate or incomplete.”

This is hardly a new revelation. The GAO has previously reported that the DOD failed to effectively implement “acquisition management controls” to ensure that the new system has the promised capabilities. Like a typical government agency, the Pentagon is moving at a snail’s pace while the tab—picked up by taxpayers, of course—swells.

Investigators point out that; “while we were told that the Army and the Air Force have corrective actions underway to address identified deficiencies, specific time lines have not been developed for purposes of tracking and monitoring progress.” It doesn’t seem like anyone is in a big hurry.