DOD Not Properly Managing Financial Workforce, Puts Audit in Jeopardy: GAO

The Department of Defense (DOD) was once again criticized by the Government Accountability Office (GAO) for failing to properly manage its financial management workforce.

In a new report, GAO chided DOD for not ensuring that it has a sufficient and skilled workforce to monitor its finances. DOD is one of the largest organizations in the world with an estimated $3.8 trillion in assets.

The department is also working toward a 2028 deadline for a clean audit opinion, as DOD is currently the only major federal agency without one.

“DOD financial management has been on GAO’s High Risk List since 1995,” GAO said in its report. “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.” 

DOD was criticized for only hitting three of the five principles when it comes to strategic workforce planning.

While proficient at involvement of top management, employees and other shareholders, using existing workforce flexibilities to support those strategies, and monitoring and evaluating outcomes, DOD was only partially proficient at determining needed critical skills and developing strategies to address gaps in critical skills.

On the critical skills front, the report said DOD is aware of its full-time workforce but “does not know how many financial management contractor staff it has or what functions they collectively perform. This presents a major challenge in determining workforce needs.”

GAO also chided DOD over a lack of succession planning and filling critical skills gaps should vacancies arise. It notes the agency has “not developed and implemented documented succession policies and plans. As a result, DOD increases the risk that it will be unable to quickly fill expected gaps in positions.”

Recommendations

GAO made two recommendations. They include having the Secretary of Defense oversee strategy development for identifying contractor functions and understanding workforce needs and for developing written plans for succession planning in financial management.

DOD concurred with succession planning. On the contractor recommendation, DOD disagreed, stating that specific skillsets are identified by contractors not by the department.