DoD Financial Management- More Reliable Information for Decision Makers
The focus of the article DoD Financial Management by William N. Washington is to emphasize the results of financial management systems inefficiencies and the costs that the DoD (Department of Defense) is paying for them (Washington 38). Throughout the article, the emphasis is on ABC (activity based costing), ERP (enterprise resource planning) and their importance in being able to both track what is happening within the organization, make economic choices on outsourcing, and manage the expenses of weapon system working capital funds (Washington 38). The organization referred to within the article is the Department of Defense (DoD) and the specific sites where improvements and declines have been made within the DoD's Depots. Emphasis is placed on whether the DoD is realistically costing their products and correctly tracking their assets (which was highlighted recently by the GAO (Government Accounting Office report)) (Washington 38).
One of the faults most commonly referred to by the article was "inability to fully institute sound financial management practices ... across the full spectrum of record keeping and control systems." (Washington 38). As the GAO report points out, these problems weaken the DoD's ability to:
1.Know the condition and location of all its assets.
2.Safeguard those assets from physical deterioration and loss.
3.Prevent the unneeded purchase of assets already on hand.
4.Determine the full costs of the programs that use those assets.
This article specifically addresses these concerns within the depot's financial environment.
A specific area that the author addresses is financial management. Several of the troubles that the GAO report referred to was in the area of the reliability of the DoD's cost information. The GAO stated, "DoD's financial management systems are not designed to...