	Background

Key DOD financial managers face considerable challenges in addressing the financial management needs of a DOD organization that is without parallel in the size, diversity, and complexity of its operations; repeated audit findings that deficiencies in personnel experience or competencies are a major contributor to DOD’s continuing financial deficiencies; and existing and enhanced accounting requirements that must be implemented throughout DOD. DOD has a vast number of financial management systems. Government Performance and Results Act of 1993 (GPRA or “the Results Act”). It is also noteworthy that several of the state government and private sector respondents indicated that they had designed their training programs, in part, in recognition of the training requirements that existed for holders of professional certifications. Many Key DOD Financial Managers Received No Accounting and Financial Training

Our recent studies showed that 53 percent of DOD’s key financial managers responding to our survey did not receive any accounting or financial training during calendar years 1995 and 1996, the 2-year period covered by our survey. Some of these state government and private sector respondents had established training requirements for their financial managers. In addition, several organizations noted that their programs were designed, in part, in recognition of the training requirements that existed for holders of professional certifications. Those states with such requirements had, on average, 36 hours of training required in 1996, including 26 hours in technical accounting training. In his 1997 “Defense Reform Initiative: The Business Strategy for Defense in the 21st Century,” Secretary of Defense Cohen stated that DOD considers itself to be a world-class organization despite rendering second-rate education, training, and professional development to its civilian employees. For example, the plan does not specifically address minimum annual training requirements, including a recognition that the majority of the training must be in technical accounting or other related financial management areas; the key competencies associated with knowledge of accounting concepts, such as the statements of federal accounting standards, and JFMIP’s systems requirements; how the general courses/subject areas will be linked to specific training courses that can be used to attain an identified competency; and how the competencies and developmental activities identified will be applied to both new hires and individuals currently on-board by job series and grade level. The military services’ efforts to improve the skills of their financial management personnel include (1) an Air Force professional development guide for its financial management and comptroller officers, which provides information on career broadening, formal training, and professional development, (2) an Army initiative intended to improve its personnel capabilities with respect to information technology, workforce effectiveness, financial management tools, funds management, and resource management, and (3) a Navy effort to revise its training program for its civilian financial management workforce to address financial management competencies. Agency Comments and Our Evaluation

In written comments on a draft of this report, DOD agreed with the general conclusion presented in the report regarding providing a strong emphasis on training as a means of upgrading workforce knowledge of current financial management, accounting, and reporting requirements. We disagree with DOD’s position. We also drew upon the information gathered from our audit of the state governments and private sector companies that may be useful to DOD in assessing changes needed to enhance its financial management workforce. Federal Financial Accounting Standards

Comments From the Department of Defense

The following is GAO’s comment on the Department of Defense’s letter dated June 16, 1998.
Why GAO Did This Study

Pursuant to a legislative requirement, GAO reviewed the lessons learned from the results of its survey of selected large state governments and private-sector corporations that the Department of Defense (DOD) could use to augment its existing plans to upgrade the competencies of its key financial managers.

What GAO Found

GAO noted that: (1) a key lesson learned from its survey data is that many state government and private-sector organizations place a strong emphasis on training as a means of upgrading workforce knowledge of current financial management, accounting, and reporting requirements; (2) on average, key financial managers in the surveyed large state governments and private-sector organizations received 31 hours and 26 hours of training, respectively, in 1996--most of which was in technical accounting subjects; (3) some of the surveyed organizations had established training requirements for their financial personnel; (4) also, several organizations noted that their programs were designed, in part, in recognition of the training requirements that existed for employees holding professional certifications; (5) these approaches may be useful to DOD in addressing its financial management problems; (6) over half of the key DOD financial managers GAO surveyed--who all held leadership positions throughout DOD's network of financial organizations--had received no financial- or accounting-related training during 1995 and 1996; (7) these key personnel face the challenge of leading DOD's efforts to produce reliable financial data: (a) throughout a large complex DOD organization with acknowledged difficult financial deficiencies; and (b) that build upon existing requirements to include recent, more comprehensive accounting standards and federal financial management system requirements; (8) in addition, full implementation of the Government Performance and Results Act will require DOD financial personnel to provide information on cost data associated with DOD's program results; (9) technical financial- and accounting-related training to supplement on-the-job experiences of DOD's key financial managers is critical to ensuring that such accurate financial data are available; (10) the Secretary of Defense has stated in a recent major reform initiative that while the department is a world-class organization, it is rendering second-rate education, training, and professional development to its civilian employees; (11) moreover, the Defense Finance and Accounting Service (DFAS) is developing a plan intended to identify the kinds of skills and developmental activities DFAS financial personnel need to improve their competencies; and (12) in addition, DOD has not yet established a departmentwide focus with accountability to ensure that efforts to improve DOD's financial managers' training are effectively coordinated with the Secretary's broader training reform initiative.