FOR THE RECORD CON G R E S S IONAL UPDATE
MILITARY READINESS AND FINANCIAL MANAGEMENT IN FOCUS The House and Senate Armed Services Committees (HASC and SASC) held more than 25 hearings in June and July, many of them focusing on DOD financial management and the impact of budget cuts on military readiness.
On July 27, the SASC readiness subcommittee, led by Sen. Claire McCaskill (D-MO), heard testimony from Under Sec- retary of Defense (Comptroller) Robert F. Hale on financial management and business transformation efforts in the Pen- tagon. McCaskill said that DOD “financial management systems are riddled with decade-old problems that are difficult to reverse” and questioned the effectiveness of the Enterprise Resource Program that is being deployed to military offices. Hale acknowledged that DOD has “a long way to go” before reaching auditability. The National Defense Authorization Act (NDAA) for Fiscal Year 2010 mandates that DOD reach full auditability status by 2017. The hearing also included tes- timony from the service comptrollers, including Assistant Secretary of the Army (Financial Management and Comptrol- ler) Mary Sally Matiella.
(Hearing transcript, webcast, and written testimony available at
http://armed-services.senate.gov/ e_witnesslist.cfm?id=5241)
The HASC, meanwhile, created a new Fiscal Management and Auditability Reform Panel to investigate DOD business practices. The new panel is led by Chairman Michael Conaway (R-TX) and Ranking Member Robert Andrews (D-NJ). Andrews pre- viously chaired the HASC’s Defense Acquisition Reform Panel, which authored the IMPROVE Acquisition Act, incorporated into the FY11 NDAA.
The new HASC panel held its first hearing July 28 with testi- mony from Hale, DOD Deputy Chief Management Officer Elizabeth A. McGrath, and General Accountability Office expert Asif A. Khan. Khan testified that DOD’s auditability problems are directly attributable to the acquisition process and praised the new Financial Improvement and Audit Readiness Plan released by Hale earlier this year.
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FUTURE ACTION The SASC version of the NDAA for FY12, which the committee approved June 17, is pending consideration by the full Senate. Once the bill passes the Senate, a conference committee will rec- oncile the differences between the House and Senate versions of the NDAA. The House passed its version May 26.
(Hearing webcast and written testimony available at
http://armedservices.house.gov/index.cfm/2011/ 7/dod-s-plans-for-financial-management- improvement-and-achieving-audit-readiness)
FY12 LEGISLATIVE UPDATE On July 8, the House of Representatives approved the Defense Appropriations Act for FY12, which was reported by the House Appropriations Committee on June 16. The House bill appropri- ates more than $649 billion for DOD activities in FY12, roughly $8 billion less than President Obama requested.
The Senate Appropriations Committee (SAC) approved its version of the FY12 Defense Appropriations Act on Sept. 15. The SAC bill cuts the base FY12 DOD budget by $26 billion while fully funding the President’s budget request for Overseas Contingency Operations.
Appropriators planned to approve a continuing resolution to fund the federal government through the first weeks or months of the new fiscal year that began Oct. 1, with an omnibus appro- priations package to follow sometime in late October. SAC Chairman Daniel Inouye (D-HI) said that he and HAC Chair- man Hal Rogers (R-KY) were committed to completing action on the FY12 appropriations cycle before the end of October.
Thus far, the Senate has voted on only one FY12 appropriations bill, the Military Construction and Veterans Affairs, and Related Agencies [MILCON-VA] Appropriations Bill, which probably will serve as the legislative vehicle for the FY12 omnibus package.
All of this activity on FY12 appropriations is being conducted in the shadow of the Budget Control Act of 2011. This bill was the result of weeks of tense negotiations between the White House and Congress to raise the Nation’s debt ceiling and avoid a default on the Nation’s loans. Republicans insisted on large spending
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