Invoice processing platform--the future of DoD reimbursable transactions.

AuthorGrenfell, John P.

Some of you might have attended the workshop "Two for the Price of One--Standardizing Interagency Agreements and E2E BPR of the IGT" presented at PDI 2015 in New Orleans or read the article, "Improving DoD's Intra/Inter-Governmental Financial Reporting ..." (1) and have at least become familiar with the term IPP--Invoice Processing Platform. I recently attended a session on November 19th, 2015 held at the Mark Center in Alexandria, VA. This article is intended to explain the importance of this piece of the DoD financial statements from my perspective.

The U.S. Department of Defense (DoD) is a large and complex organization that is the nation's number one employer. The DoD also has the most complex and confusing general ledger in the world. According to the Defense Finance and Accounting Service (DFAS) statistics for FY 20151 2 the DoD had 135.7 million pay transactions, 190.6 million general ledger accounts and disbursed $477 billion dollars (2). This is a snapshot of the magnitude of financial activities processed by this agency. These figures do not include transactions processed by other DoD entities, such as the U.S. Army Corps of Engineers. The DoD has not had a clean audit opinion ever. This is not news to anyone in the financial management community, however, despite our complexities, the DoD is moving towards the goal of producing auditable financial statements. The Department has 13 auditor identified material weaknesses (2): (1) Financial Management Systems; (2) Fund Balance with Treasury; (3) Accounts Receivable; (4) Inventory; (5) Operating Materials and Supplies; (6) General Property, Plant, and Equipment; (7) Government Property in Possession of Contractors; (8) Accounts Payable; (9) Environmental Liabilities; (10) Statement of Net Cost; (11) Intragovernmental Eliminations; (12) Accounting Entries; and (13) Reconciliation of Net Cost of Operations to Budget. Since we have all been experiencing the transition from legacy systems to more robust enterprise resource planning (ERP) systems over the past decade and sometimes longer. These systems have helped to reduce some of the imbalances with the DoD's ledgers, however, one area has continued to be an issue in terms of material internal control weaknesses: reimbursable transactions.

According to a report (2) on internal control over financial reporting, the DoD is required to resolve financial and accounting inconsistencies in order to accurately report Fund Balance with the...

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