With its self-imposed clean audit opinion deadline of 2028 nearing, the Department of Defense (DoD) needs to ensure that it has both the sufficient and skilled workforce it needs to successfully fulfill its financial management tasks, a new watchdog report says.
DoD has been working toward a clean audit opinion for over 30 years but remains the only major Federal agency without one. It faces its own December 31, 2028, deadline to achieve this milestone, but the Government Accountability Office (GAO) is warning that without better contractor workforce strategies and documented succession plans, the agency may fall short of that goal.
The new report conducted by GAO on DoD’s financial management workforce planning finds that while the agency has been partially consistent with key principles needed to determine critical competencies needed to achieve results, the agency is missing assessments necessary to determine what is needed to attain these goals.
“DOD financial management has been on GAO’s High Risk List since 1995,” GAO said. “Achieving a clean audit opinion on its department-wide financial statements remains a goal that DOD has not yet attained. DOD’s audit readiness depends on ensuring that its financial management workforce has the needed skills.”
“Agencies should conduct needs assessments to determine the number of employees needed with specific competencies and roles within the financial management workforce,” said GAO. “This is especially important as changes in national security, technology, budget constraints, and other factors change the environment within which federal agencies operate.”
While having some processes in place to determine agency needs, DoD lacks contractor data – with branches such as the Air Force noting that they don’t know how many contractors are working in information technology development and financial management.
DoD has been facing pressure to modernize its IT systems in order to help with better financial management, with a GAO official stating in September that the agency is still struggling with that task. Acting on GAO recommendations for modernizing legacy IT systems may assist the agency in attaining a clean audit score, the official said.
Recommendations for the DoD include the Secretary of Defense overseeing strategy development for identifying contractor functions and understanding workforce needs; and developing written procedures for succession planning in financial management workforce across departments.
DoD pushed back against both recommendations, and said it disagrees with the first recommendation on how it handles its financial management contracts, noting that the agency also doesn’t control how many skillsets or personnel contractors need.
