DISA’s implementation plan for DPAS was dated February 6, 1996. In addition, we reviewed DPAS implementation at the Huntsville DISA Defense Megacenter. However, DPAS does not have the financial information to process certain minor types of general PP&E, such as foreclosed assets and the depletion of natural resources, in accordance with DOD policy and existing accounting requirements. For example, natural resources represent only 1.2 percent of DOD’s total general PP&E. Also, the DOD Comptroller has not yet provided guidance to ILSC on implementing federal accounting standards that become effective for periods beginning after September 30, 1997. The DPAS functional design can be modified to meet all current and pending property accounting requirements through changes that include the addition of data elements and financial transactions. DPAS cannot track deferred maintenance costs. Implementation of DPAS at DISA Does Not Ensure Financial Control and Accurate Reporting

An objective of implementing DPAS DOD-wide is to ensure financial control and accurate reporting of general PP&E. Therefore, DPAS data cannot be completely reconciled with DISA’s core accounting system data. We found over $100 million in differences between the values shown in the DPAS detailed property records and the summary- level records maintained in the DISA general ledger. DISA was not performing reconciliations between DPAS and its general ledger. DOD Does Not Have a Detailed DPAS Implementation Strategy

Many of the problems experienced at DISA and resulting in inaccurate property data can be linked to several issues that affect DOD-wide implementation of DPAS. Conclusions

As designed, DPAS produces transactions to provide financial control and to account for most general PP&E, but needs to be enhanced to meet all applicable federal accounting standards. Develop, in consultation with the appropriate Assistant Secretaries, a concept of operations that (1) lays out how the property function is to be accomplished, including identification of needed manual and automated interfaces and related controls, and (2) defines for both the current and future operating environments the roles, responsibilities, and relationships among the various DOD entities involved, such as the Comptroller’s office, DFAS, DOD component agencies, and the military services. Develop a detailed DPAS implementation plan that includes a schedule that identifies at what sites and when the system will be implemented. In addition, to resolve the implementation problems specific to DISA, we recommend that the Director, DISA, (1) submit a request to the DPAS project office to include appropriate additional transaction edits required by DISA for general ledger processing, (2) correct the interface program, and (3) finalize procedures for reconciliation of DISA’s general ledger accounts for property to DPAS property records, including provisions to ensure timely reconciliations are accomplished and general ledger control is maintained over general PP&E. We believe that the implementation issue which arose at DISA could have been mitigated if the DPAS design included the standard general ledger posting logic.
Why GAO Did This Study

GAO determined whether the Defense Property Accountability System (DPAS): (1) was designed to meet functional accounting requirements for general property, plant, and equipment (PP&E); and (2) was implemented at the Defense Information System Agency's (DISA) Defense Megacenters in a manner that ensures it meets functional accounting requirements for general PP&E.

What GAO Found

GAO noted that: (1) as functionally designed, DPAS can provide financial control and generate information to account for most general PP&E; however, DPAS cannot yet meet requirements that become effective for accounting periods beginning after September 30, 1997; (2) DPAS does not contain the information needed to meet new federal accounting standards for deferred maintenance and environmental clean-up costs; (3) the DPAS design does not meet several current Department of Defense (DOD) accounting requirements for certain minor types of PP&E; for example, DPAS does not have the information to meet the requirements for recording depletion of natural resources, which represent 1.2 percent of DOD's total general PP&E; (4) DPAS needs to be modified with the addition of data elements and financial transactions to meet new standards and requirements as well as the current ones not yet covered; (5) implementation of DPAS at DISA did not ensure financial control and accurate reporting of general PP&E; (6) DPAS was not correctly interfaced with the accounting system due to errors in the interface program used to translate DPAS data to data understandable to DISA's general ledger; (7) this caused transactions to be recorded incorrectly in the general ledger, resulting in a material difference of over $118 million in property values between DPAS detailed records and the general ledger summary records; (8) the problem with the interface program could have been mitigated if transactions using the standard general ledger accounts were created in DPAS; (9) in addition, compensating controls, such as routine reconciliations between the two systems, were in place; (10) many of the problems with the accuracy of property data experienced at DISA can be linked to several issues that affect DOD-wide implementation of DPAS; (11) DOD, as part of its DPAS strategic planning process, has not defined the roles, responsibilities, and relationships among the various DOD entities involved, interfaces, and related controls; (12) this part of the strategic planning has not developed a detailed DPAS implementation schedule that identifies at what sites and when the system will be implemented; and (13) DOD has left it up to each military service to determine where, when, and how DPAS is to be implemented without providing adequate implementation guidance or ensuring that the implementation schedule includes all sites, making it unlikely that DPAS will be implemented across DOD by the Comptroller's target date of 2000.