Financial Management

The Pentagon's efforts to reform its financial management operations will play a critical role in ensuring that every possible defense dollar goes toward maintaining the readiness of fighting forces while reducing the costs of the Defense Department's (DOD) support operations. Today, DOD must have good financial management information to make sound resource allocation decisions, safeguard its huge investment in assets, and control its operating costs. DOD now recognizes the seriousness of its financial management problems and the urgent need for corrective measures. However, truly improving DOD's financial management operations is a major undertaking. In fiscal year 1994, DOD was accountable for more than $1 trillion in assets, more than three million military and civilian personnel, and $272 billion in expenditures, which represented about half of the government's discretionary spending. DOD has serious, long-standing problems in correctly disbursing billions of dollars in payments to vendors and providing reliable financial and cost information to those responsible for carrying out and overseeing DOD's missions and programs. The Comptroller General's testimony discusses DOD's plans for reform and makes suggestions to build on these efforts.