The Department of Defense (DoD) is making progress in reducing costs related to improper payments through its Advana centralized data and analytics platform, but the agency continues to struggle with some of its financial IT systems, a Government Accountability Office official said in testimony to House lawmakers this week.
In written testimony to the House Subcommittee on Government Operations and the Federal Workforce, Asif Khan, GAO’s director of Financial Management and Assurance, highlighted some of the challenges DoD continues to face with legacy IT systems while also crediting the benefits achieved through the Advana system.
Despite accounting for approximately half of the Federal government’s discretionary spending, DoD remains the only major Federal agency without an unmodified or “clean” audit opinion on its financial statements.
Khan noted that Advana is enhancing financial data by linking nonfinancial data sources, helping to standardize DoD’s data and address historical financial management challenges.
“In 2023 and 2024, we estimated savings associated with DoD’s ability to identify and avoid making improper payments through its expanded use of this system, estimating that DoD saved at least $5.5 billion in avoided improper payments that it did not pay from 2020 through June 2023,” Khan told lawmakers.
DoD began using Advana in 2017 when the Office of the Deputy Chief Financial Officer and Defense Finance and Accounting Service started building a universe of transactions to support the DoD-wide financial statement audit.
While harnessing Advana is a step in the right direction, Khan emphasized that DoD needs to act on existing GAO recommendations to modernize legacy IT systems if it wants to make more progress on the financial front.
To improve DoD’s financial management, department auditors have issued thousands of notices of findings and recommendations and material weaknesses. In response, DoD has identified priority areas and developed a strategy, plans, and roadmaps.
“These actions are important steps, but DoD has faced challenges in meeting target remediation dates, and DoD’s use of aging legacy financial systems continues to hinder its efforts,” Khan said. By addressing outstanding GAO recommendations, DoD will be able to “track audit remediation efforts, avoid system transition delays, modernize its financial systems, and achieve a clean audit opinion,” Khan said.
