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Senators question Defense's attempts to improve management

Defense official testifies that by 2009 the Pentagon expects to earn clean audit opinions on 39 percent of its assets, up from almost none in the 1990s.

Defense Department officials Tuesday defended their plans for improving management of their financial and business systems against charges from members of a Senate Homeland Security and Governmental Affairs subcommittee that their efforts are slow and insufficient.

"I am not sure large quantities of change have occurred," said Sen. Tom Coburn, R-Okla., who pressed Pentagon officials to commit to more frequent consultation with the Federal Financial Management Subcommittee and the Government Accountability Office.

At issue is billions of dollars the department spends each year on separate business and financial systems. Defense since 1990 has been attempting to modernize thousands of unique accounting and information systems that limit its ability to track many of its costs.

The department has a large component, the Business Transformation Agency, dedicated to steps such as combining software systems and applying the Lean Six Sigma business improvement methodology across the department.

Defense Principal Deputy Undersecretary David Patterson testified that by 2009 the Pentagon expects to earn clean audit opinions on 39 percent of its assets, up from almost none in the 1990s. Patterson said that is a significant achievement for what he called "the largest and most complex organization in the world."

But subcommittee members faulted the department for its continued failure to collectively achieve a clean audit, which members said is among the management problems that affect war efforts.

"Not having an audited financial statement, not having procurement under control is in fact costing lives," Coburn said.

Subcommittee members faulted especially Pentagon officials' resistance to congressional pressure to create a full-time, high-level chief management officer to push through changes.

Critics say top department officials struggle to see through reforms because they are too busy and not on the job long enough. That argument has been advanced especially by Comptroller General David Walker.

The fiscal 2008 defense authorization bill would require the Pentagon create a full-time chief management officer reporting to Deputy Defense Secretary Gordon England. The official would have a fixed term allowing him or her to stay on beyond the current administration.

The Pentagon has resisted that effort, arguing that England fills a CMO role and adding a position would create unneeded bureaucracy.

Deputy Undersecretary of Defense for Business Transformation Paul Brinkley said at the hearing that by mandating a CMO, Congress would limit the department's flexibility.

Walker rejected that stance. "The only outlier in this [CMO] debate is the Department of Defense," he said. "And frankly I'm growing a little frustrated."