DOD’s Failure To Address High-Risk Areas Results In Billions Wasted Each Year

GAO said DOD must commit to reform business practices because it is wasting billions in resources annually.

What’s a few billion dollars lost every year anyway? That may be the question the Department of Defense can no longer shrug off if the Government Accountability Office has its way. In testimony provided to the Subcommittee on Readiness and Management Support, Senate Committee on Armed Services, GAO reported that if DOD was going to improve its efficiency, it would need to commit to business management reform, something that the agency has acknowledged previously but that still has not been implemented.

In January 2005, GAO released its 2005 high-risk series update report for the 109th Congress. The high-risk series illustrates major government programs and operations that need urgent attention and transformation to ensure that the federal government functions in the most economical, efficient, and effective manner possible.

GAO also emphasizes those federal programs and operations that are at high risk because of their greater vulnerabilities to fraud, waste, abuse, and mismanagement. Of the 25 areas on GAO’s 2005 high-risk list, eight are DOD programs or operations and six are government-wide high-risk areas for which DOD shares some responsibility.

GAO has reported on inefficiencies and inadequate transparency and accountability across DOD’s major business areas, resulting in billions of dollars of wasted resources annually. GAO indicated that progress in addressing one of these new high-risk areas-DOD’s overall approach to business transformation-is needed to confront the other areas.

“Although DOD’s senior leaders have shown commitment to business management reform, little tangible evidence of actual improvement has been seen to date,” GAO reported.

In addition to the specific high-risk areas, there are other broad-based challenges facing our government that merit continuing close attention, according to GAO. One emerging area of concern involves the need for DOD along with other agencies to develop and use a strategic risk-based approach for establishing goals, evaluating and setting priorities, and making difficult resource decisions across the department. Strategically managing risks and investment decisions is crucial for DOD as it faces growing questions about the affordability and sustainability of current defense spending.

To move forward, GAO said there are three key elements that DOD must incorporate into its business management reform efforts to successfully address the systemic management problems related to its high-risk areas.

– First, any reform efforts must include a comprehensive, integrated strategic plan with results-oriented performance measures, including a well-defined blueprint (an enterprise architecture) to guide and constrain implementation of such a plan.

– Second, central control of system investments is crucial for successful transformation.

– And, a legislatively created deputy secretary of defense for management is essential for providing the strong and sustained executive leadership needed if reform efforts are to succeed.

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources. Follow Ralph on Twitter: @RalphSmith47