Pentagon Financial Execs in Uncharted Waters, Survey Shows

Defense Department file photo

Budget uncertainty, low morale and obstacles to audit readiness are combining to confront Defense Department financial executives with an unprecedented storm of challenges, according to a survey released on Wednesday.

Ninety-four percent of the 1,006 respondents said the current environment of planned defense budget cuts and across-the-board cuts due to sequestration made their challenges greater than ever, according to the 11th annual survey by the American Society of Military Controllers and Grant Thornton LLP, titled “Navigating Through Uncertainty.”

The survey also found that across-the-board cuts are harming efforts to achieve the congressionally required audit-readiness of financial management programs. Cost information is vital for knowing “which cuts matter and which ones don’t,” the survey found. More than 61 percent said they had some level of confidence that their organizations would meet the 2014 deadline, as compared to nearly 13 percent who had little or no confidence in achieving this goal. But when asked about their parent organizations, the executives’ confidence in those organizations dropped more than 29 percentage points.

Respondents also said the returns on investments in information technology have not been as high as expected because the new systems added complexity and increased workload. And the managers have less choice in acquisition strategy, which may limit the benefits from contracts. They favor greater focus on elimination of redundancy than on acquisition initiatives.

“These survey results suggest there is a real risk that investments in audit readiness may not be enough to meet the aggressive audit deadlines facing Defense financial management executives,” said Grant Thornton Global Public Sector Managing Principal Srikant Sastry. “In light of limited resources, Defense agencies may need to move directly to audit before we’ll know for sure.”

The survey methodology encompassed face-to-face interviews with 35 defense financial leaders, and online responses from 1,006 defense financial professionals, including 6 percent active-duty uniformed personnel, 89 percent defense civilian employees, 1 percent retirees, and 4 percent other (primarily academics and employees of private-sector companies). Of the active-duty respondents, 58 percent were officers. Sixty-seven percent of the civilian respondents were GS-12 or above.

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