The Department of Defense (DoD) operates hundreds of automated information systems—financial, non-financial, and mixed—in executing its missions and programs. Although the Defense Finance and Accounting Service (DFAS) is responsible for the majority of the Department’s finance (i.e., entitlement and disbursing) and accounting systems, DFAS is not responsible for all of the systems that produce financial management data for all of its accounting systems. Non-DFAS systems that support other functional areas, including acquisition, logistics, property management, and personnel, generate and process a significant amount of financial data that are ultimately used by the Department for management, analysis, and financial reporting.
DoD’s auditors, over the past dozen years or so, have issued numerous reports that criticized DoD’s financial management systems for their inability to capture, maintain, control, and report reliable and consistent information in a timely manner. During the last several years, substantial improvement of DoD’s financial management has been a top priority of the Department’s leadership. DoD’s leaders concluded that the Department’s financial management deficiencies were more fundamental and entrenched than previously recognized. The remedy has been the most comprehensive reform of financial management systems and practices in DoD history.
A major component of DoD’s reform initiatives is the consolidation and standardization of finance and accounting systems. The first step was to designate certain existing finance and accounting systems as migratory systems, into which similar systems (such as civilian pay, military pay, travel, etc.) were to be consolidated. Simultaneously, DoD undertook improving accounting systems to make them compliant with generally accepted accounting principles for Federal agencies. The ultimate goal of the improvement efforts is to make the accounting systems capable of providing accurate, timely, and auditable information to management and decision-makers, including Congress.
In order for its accounting systems to produce accurate and auditable information, DoD needs to enhance many systems other than just the accounting systems. Within the Department, dozens of systems provide financial data to the DFAS-operated systems. Much of this data, which flows through a myriad of “feeder systems,” is not under adequate internal and data controls and does not comply with Federal requirements. Therefore, the Department has embarked on an effort to bring its critical feeder systems into compliance with applicable Federal requirements.
The 1990s saw a tremendous change in emphasis by Congress concerning the Federal government’s financial management operations. No longer is almost exclusive emphasis on fund control and budget execution the primary driving force behind agencies’ financial management operations. From late 1990 through 1996, the Congress passed a number of laws directing agencies to improve their financial management operations, systems, performance, internal controls, and financial reporting.
Several agencies and organizations promulgate authoritative regulations and guidance relative to financial management systems with which Federal agencies are to comply. Principal among these are the Office of Management and Budget (OMB), the Department of the Treasury, the General Accounting Office (GAO), the Financial System Integration Office (FSIO), and the Federal Accounting Standards Board (FASAB).
Since the late 1990s, DoD, with support from JITC, has worked to implement a comprehensive and manageable test and evaluation methodology to ensure a strong, disciplined approach is followed to assess compliance with the applicable Federal Financial Management Requirements (FFMRs) for migratory DoD Automated Information Systems (AIS). This disciplined approach ensures that those systems under development meet functional and performance; statutory and regulatory; other customer, stakeholder and user requirements.
The DFAS publication, “A Guide to Federal Requirements for Financial Management Systems” (hereafter referred to as the “DFAS Guide”) was developed as a guide for federal requirements applicable to DoD financial management systems. The DFAS Guide represents a compilation of federal financial management systems requirements and is applicable to all accounting and finance systems owned, operated and maintained by DoD. The key legislation that led to the creation of the DFAS Guide was the Federal Financial Management Improvement Act (FFMIA) of 1996. The DFAS Guide is the foundation from which system-level compliance assessments are based.
DoD Services and Agencies utilize Independent Consulting Firms (ICF) as part of its strategy to assess systems compliance with applicable FFMRs as derived from the DFAS Guide. JITC serves as an ICF for FFMIA compliance assessments. We have the experience and the understanding of the process, start to finish.
For more detailed information about the support that the Joint Interoperability Test Command provides to the FFMIA PMO, please contact:
FFMIA POINTS OF CONTACT