Over the past 12 years, the department has  initiated several broad-based departmentwide reform efforts intended to  fundamentally reform its financial operations as well as other key business  areas, including the Defense Reform Initiative, the Defense Business  Operations Fund, and the Corporate Information Management initiative. These elements, which we believe are key to any successful approach to  financial management reform, include   addressing the department’s financial management challenges as part of  a comprehensive, integrated, DOD-wide business reform;  providing for sustained leadership by the Secretary of Defense and  resource control to implement needed financial management reforms;  establishing clear lines of responsibility, authority, and accountability  for such reform tied to the Secretary;  incorporating results-oriented performance measures and monitoring  tied to financial management reforms;  providing appropriate incentives or consequences for action or inaction;  establishing and implementing an enterprise architecture to guide and  direct financial management modernization investments; and   ensuring effective oversight and monitoring.
What GAO Found

The Department of Defense (DOD) faces complex financial and management problems that are deeply rooted in DOD's business operations and management culture. During the past 12 years, DOD has begun several broad-based departmentwide reform efforts to overhaul its financial operations and other key business areas. These efforts have been unsuccessful. GAO identified several key elements that are essential to the success of any DOD financial management reform effort. These include (1) addressing the department's financial management challenges as part of a comprehensive, integrated, DOD-wide business reform; (2) providing for sustained leadership and resource control to implement needed reforms; (3) establishing clear lines of responsibility, authority, and accountability for such reform; (4) incorporating results-oriented performance measures and monitoring tied to the reforms; (5) providing appropriate incentives or consequences for action or inaction; (6) establishing and implementing an enterprise architecture to guide and direct financial management and modernization investments, and (7) ensuring effective oversight and monitoring.