The Department of Defense (DoD) and Department of Veteran Affairs (VA) are at various stages of modernizing financial management processes but face similar challenges with legacy systems and data compatibility.

During a Federal News Network webinar on April 2, DoD and VA officials spoke about the progress they are making in their efforts to modernize financial management process, as well as the challenges they continue to encounter.

Edward Murray, the principal deputy assistant secretary for management at the VA, said agency officials are continuing to carry out the agency’s large-scale financial system modernization program, while trying to maintain VA’s consecutive clean audit record.

“When we did our major system migration, we felt we had a lot of turf to protect … We were told, ‘Be successful with your new system implementation, and don’t lose our clean audit opinion,’” Murray said.

Last year the VA achieved its 25th clean annual audit in a row. But in addition to maintaining its record of success, the VA’s modernization effort also includes attempts to build on previous audit findings to address some of the agency’s longstanding gaps and weaknesses — most significantly the lack of integration between acquisition and financial systems.

“We’re looking to elevate where we were and streamline processes, prove internal controls, all those good things that you would expect once you’ve achieved a clean audit opinion level for some time,” Murray said. “Preserve it and grow it.”

Notably, the agency’s National Cemetery Administration recently became the first agency component to adopt that integrated system, Murray said.

On the other hand, the Pentagon has long failed to pass its annual audit, and standing in the way toward that goal is the agency’s myriad IT systems across the department.

A recent DoD inspector general audit found the department operates at least 4,500 unclassified IT systems. And the IG reported that DoD does not have a “complete or accurate” inventory of systems relevant to financial reporting.

“When you look at it from a financial reporting perspective, every time you transmit data between systems, there’s a risk that exists that that data is not transmitted accurately, completely, and timely between those two systems,” said Shawn Lennon, the finance deputy director and deputy chief financial officer at the Defense Logistics Agency.

Managing data flows between disparate systems remains a major challenge for audit readiness, said Lennon.

But the Marine Corps last year made history as the first military service branch to receive an unmodified audit opinion. And a factor that helped the Marine Corps address its audit issues is DoD’s ADVANA big data analytics platform, which brought their data together into one system.

The U.S. Navy and DoD are looking at this win and trying to replicate it throughout the rest of the service branches and the department as a whole.

Alaleh Jenkins, the principal deputy and assistant secretary of the Navy for finance management and comptroller at the Department of the Navy, said that the Marine Corps’ clean audit highlighted some of the enterprise policy changes that the service branch underwent, and which enabled the clean audit result.

One of the major changes is the Navy’s recent attempt to bring together several systems and processes under its Enterprise Resource Planning (ERP) program, which is a massive undertaking with numerous data and system integration challenges, Jenkins said.

The Navy is migrating data into its new ERP system, and the department is working to ensure it has access to consolidated and timely data across functions like acquisition, human resources, and logistics.

“The more interfaces we have with the legacy system, the more it complicates our situation for data quality,” Jenkins said.

“It brought in a different level of attention to use of data analytics … Our data by itself, the finance data, it’s meaningless,” Jenkins said. “It is powerful when it’s connected with the rest of the data.”

The Navy has created a special enclave of the DoD-wide ADVANA platform called “Jupiter” where a lot of those applications are becoming available. She said the Navy is spending a lot of time on “data cleansing” and ensuring the information is complete.

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Lisbeth Perez
Lisbeth Perez
Lisbeth Perez is a MeriTalk Senior Technology Reporter covering the intersection of government and technology.
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