DFAS Cleveland and Navy personnel deemed STARS the newest, least deficient, and most advanced of Navy’s 25 existing general fund accounting systems. Scope and Methodology

To assess Navy’s efforts to reduce the number of accounting systems and implement and enhance STARS, we examined DOD, DFAS, and Navy documents and conducted interviews with appropriate officials. The Department of Defense provided written comments on a draft of this report. Some Cost Savings Are Expected

We believe that savings will accrue as a result of eliminating the duplication and inefficiencies of supporting and maintaining Navy’s 25 existing accounting systems, although we did not attempt to quantify such savings. However, we note that achieving the projected level of net savings could be diminished by the need to provide additional training and technical support to field activities in using STARS Field Level. Although STARS was selected without the benefit of an established architecture, such an architecture can provide needed structure and discipline as the STARS enhancement projects move forward. Incomplete Planning and Unrealistic Milestones Hamper Enhancement Efforts

Our analysis noted instances of incomplete planning and missing or slipped milestones that strongly suggest that STARS enhancements will not meet DOD requirements in the near future. The Plan of Action and Milestones also indicates missing and slipped milestones. For example, we found that the plan did not address how one of the STARS modules, which currently has its own general ledger account structure, will be brought into compliance with DOD’s standard general ledger; did not address how STARS will be enhanced to comply with the audit trail key accounting requirement which states that all transactions be traceable to individual source records maintained in the system; did not specify how the systems analysis for enhancing STARS field-level and headquarters claimant modules to meet the key accounting requirement for budgetary accounting will be performed and by whom, and did not provide for analyzing and documenting the current environment and identifying needed changes, which is the approach planned in making most key accounting requirement analyses; did not provide for identifying needed changes and solutions to control weaknesses as part of the analysis of the current environment related to the system control function of STARS field-level and headquarters claimant modules; and provided, in several cases, milestones for completing the analyses of the current STARS environment and planning for future STARS enhancements that were dated several months before a contractor was scheduled to provide them. Specifically, field staff received limited training. We also found that DFAS provided insufficient STARS Field Level technical support. GAO Comments

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Why GAO Did This Study

GAO reviewed the Defense Finance and Accounting Service's (DFAS) efforts to reduce the number of Navy accounting systems and to enhance and implement a Navy-wide system to account for general fund operations.

What GAO Found

GAO found that: (1) DFAS selected the Navy's Standard Accounting and Reporting System (STARS) to serve as the Navy's system for general fund accounting; (2) although believed to be the newest, least deficient, and most advanced of the Navy's 25 existing general fund accounting systems, STARS still has serious shortcomings; (3) savings will accrue as a result of eliminating duplicate and inefficient accounting systems, but could be diminished by the need to provide additional training and technical support; (4) STARS was selected without the benefit of an established architecture, and the lack of a target systems architecture will make it difficult to guide STARS enhancement efforts, estimate enhancement costs, and evaluate alternatives that may be more effective or less expensive; (5) the STARS Plan of Action and Milestones did not include several key analysis tasks and accounting requirements, and several instances of incomplete planning and slipped milestones strongly suggest that STARS enhancements will not meet Department of Defense (DOD) requirements; (6) this piecemeal approach to STARS enhancement could result in costly and time-consuming redesign efforts; and (7) implementation of STARS at field-level activities was not completely successful, since DFAS provided limited training and insufficient technical support.