The Defense Department has long known that weaknesses in its information technology systems are a major reason it’s never been able to successfully undergo a financial statement audit.
But now that the entire department has been through a full audit for the first time, the results paint a clear picture of how serious the problem is: Almost half of the defects auditors found in 2018 were about IT systems, not financial management practices per se.
Across the 21 separate component-level audits that feed into the department-wide version, examiners issued 1,119 separate notices of findings and recommendations (NFRs) related to IT. That’s compared to 1,291 NFRs on financial matters, and despite the billions of dollars the department has spent over the past two decades to replace its legacy business systems with modern, auditable enterprise resource planning (ERP) systems.