Did that and use went way up and states that dont require it very few doctors look at the database. A doctor thinks they know what an addict looks like. They think they know what somebody with this disease looks like and they dont. Thank you very much, everybody. I think it was a very good hearing and we have got some very good notes and food for thought, so thank you very much. Its appreciated and the hearing is adjourned. Taking a look at the prime time lineup on cspan tonight, a special program on the use of consumer drones. From taking your picture, mapping construction sites to cleaning the outsides of highrise buildings. All things drones are being used for these days. On cspan2 tonight, book tv, well focus on some of 2014s nonfiction best sellers including Lynne Cheneys book on president James Madison and also starts at 8 00 p. M. Eastern. Cspan3, American History tv with u. S. Foreign policy. Well examine americas response to totalitarianism and the ra juan dan genocide. Now keep in touch with Current Events from the Nations Capital with any phone any time with cspan radio on audio now. Simply call 2026268888 to hear coverage, Public Affairs forums and Washington Journal Program and every weekday a recap of the events on washington today. You can also hear audio of the five Network Public sunday Affairs Programs starting noon at eastern. Cspan radio on audio now. Call 2026268888. Long distance or phone charges may apply. Defense Department Comptroller robert hale said recently the pentagon is on track to achieve audit readiness but that challenges remain. The imaginement of the Defense Department was the subject of a hearing by the Senate Homeland security and governmental afarrells committee. Top military officials testified on their finances and fugts. The dods Inspector General and the Financial Management director at the Government Accountable Office also gave remarks. This is two hours and 40 minutes. The hearing will come to order. Todays hearing will examine as we know the efforts under way at the department of defense to improve Financial Management and to obtain a clean, unqualified audit of the books at the department of defense. I want to begin todays hearing by asking why our Financial Management at the department of defense and any other agency is important in the first place, but especially the department of defense. Accurate and complete financial accounts give you are jetblue gave the Agency Leadership and congress the information that we need for effective management and planning. And i might add execution. Clean audible Financial Statements also give us the information we need to hold agencies accountable. To look in every nook and cranny and ask, is it possible to get better results for less money . I talk to people all the time who say to me, i dont mind paying extra taxes, i just dont want you to waste my money. We waste money probably at every agency to some extent. We especially waste it in the department of defense. And you know thats true. I know thats true. So do our taxpayers. We cannot, however, effectively identify areas to reduce spending if we dont know how much and where were spending that in the first place. Federal agencies have been required to produce audible books since the 1990s. Nearly two decades later, the department of defense, which spends nearly 2 billion every day, has yet to meet their obligations. Despite years of effort and one deadline after another, department of defense books are so flawed that auditors could not attempt to perform a complete audit. It is no surprise then that the department of defense expenses has been on theory risk list since 1995. 1995. In part, this is due to pervasive management deficiencies that would never be tolerated in private sector business. And that are actively being addressed in other federal agencies. Here are just two examples. Just last month, the Government AccountabilityOffice Released a report showing the departments antiquated inventory systems, often containing incomplete and inAccurate Information, have led to millions of dollars in wasteful ammunition purchases. The department continues to buy spare parts that it doesnt need. In fact, last year, the Department Gave this committee figures showing that at one point in 2013, it had 754 million worth of items that were on order but not yet delivered for which the military Services Simply did not need. However, the Department Still paid for and accepted the unneeded items. This is an unacceptable situation. And these are just the problems we know about. Some of the problems we know about. In all likelihood, the poor state of the departments books mask even more instances of waste and fraud. These tough Economic Times when were going to be asked and we are being asked to make decisions about pay for our active personnel, compensation for active duty personnel, compensation for our veterans, making those decisions, well be asked to make decisions about base realignment and closures again before too long. Well be making those kinds of decisions. For us, as we face those kind of decisions, i just want to say we cant tolerate this continuing level of mismanagement and waste. In 2011, we met at this same room, in the same room, dr. Coburn and i, held a hearing, maybe even with the same title, and we discussed how the department was going to meet a statutory deadline of achieving financial auditability by 2017. Just after that hearing, thensecretary of defense leon panetta made an important announcement that greatly elevated the priority of Financial Management, higher than it had been elevated before. He also established an additional deadline for partial financial audit by the end of fiscal 2014 in order to quicken the pace of improvements. To his credit, his successor, secretary hagel, has stood by these goals. This means that in seven months, the entire department should have its statement of budgetary resources, a key financial component, ready for audit. We are here today to get an update on this quickly approaching deadline. Fortunately, the department can look to some recent successes to help find the right path to reach its goal. The marine corps has made some important progress in auditing its books, achieving a clean opinion on at least a portion of its fiscal year 2012 accounts last december. And thats good news. Also, the department of Homeland Security was until recently the only other department unable to audit its finances. Last year, Homeland Security, as we know, was able to achieve a clean audit. The department created barely ten years ago, broad, large, a lot of people, a lot of money, they were able to achieve a clean audit last year. If they can do that, the department of defense needs to keep its we need to keep your feet to the fire, and you all need to get the job done. And this idea of a goal for 2014 slipping and the goal for 2017 slipping, that dog doesnt hunt here. It doesnt hunt here. Were going to make that perfectly clear. The key question is whether the department of defense is learning enough and fast enough from these examples. Let me just say, we have some obligation in this, too. When we shut down the government, we allow the government to be shut down, we do stopandgo budgeting, fiscal cliffs, you know, were part of the problem and were part of the solution. I acknowledge that. Tom coburn and i have made a compact that were not going to let the government be shut down again. Were going to do a better job of our share, and maybe if we do, you guys will do a better part of doing your part, as well. We dont want to be the problem. We want to be a part of the solution. Key question again is whether the entire department of defense is learning enough and fast enough from these examples i just mentioned. Today, weve been joined by several witnesses who are each key to helping the department of defense improve its processes and controls. Their work, if successful, will allow the department to produce reliable Financial Statements that regularly produce critical information for decisionmakers. To our witnesses, we want to thank you for joining us. We look forward to your testimony. Let me now turn to dr. Coburn for any comments he wishes to make. Thank you, dr. Coburn. Thank you, mr. Chairman, for holding this hearing. Id welcome all of our panelists and say we applaud your effort. But as my dad used to say, effort sometimes isnt enough. You have to apply maybe a different approach and a different technique. I wanted to start to read an assessment im going to put up for you comparing 2001 to where we are today. And the assessment in 2001, inability to consistently provide reviable Financial Data for effective decisionmaking still there. No change. Lack of an overreaching approach to Financial Management. Disparate systems, accounting, still exists. The far plan provides the approach. Its unclear right now to me how well its being implemented as audit goals are descoped and deadlines are missed. Systems environment remains more or less unchanged. Convoluted business processes which fail to streamline excessive process steps, sometimes driven by accounting, operational and organizational structures, further complicated by aged and disparate systems. Erp results have been mixed. Air force Expeditionary Combat support system was cancelled after nearly ten years of work and 1 billion. We recommended in 2011 it be cancelled. It took two and a half years to get it cancelled. Then we paid the contractor a payment and didnt hold them accountable for what they were developing. Difficulty in obtaining financially based outcome oriented management metrics. This problem continues. Gao has reported that metrics are not adequately defined. Inability to produce chief Financial Officer act, compliant annual Financial Statements. No change. Disproportionate budget dollars appear to support nonvalue added activities. Since useful information is hard to extract, useful corrective action is difficult to implement. With the lack of widespread understanding of how Financial Information can help us. Hasnt changed. Cultural bias towards the status quo driven by disincentives for change and short timeframes of political appointees who otherwise might serve as agents of change. No change. Requirement of an infusion of personnel with technical and financial skill sets necessary to achieve integrated Financial Management systems. Dod is investing in training programs. Its still not fully implemented. And oftentimes, cfo nominees lack the requisite qualifications. Im most surprised when i hear some of my associates ask why auditability matters. I suspect this question is a result of many colleagues lack of real world experience. Theyve never run a business or an organization that has to make the most of its resources that it has available. To a business, and the pentagon is not a business, but to a Management Organization reliable Financial Data is what powers the strategic planning, the strategic budgeting and operational decisions and often means the difference between success and failure. But even to congress, auditability is a paramount importance. We cannot do our job without it. The fact that our largest federal department with nearly a 700 billion budget still cant comply with the law after several decades is a failure that rests squarely on us, the congress. Because by accepting the continued excuses and delays we have failed to do our job. No money shall be drawn from the treasury but in consequence of appropriations made by law and a regular statement and account of the receipts and expenditures of all public money shall be published from time to time. We havent done that in 30 years in the pentagon. The intent of this clause is simple. Congress cannot possibly know that the executive branch is obeying the first part of the appropriation clause, spending, without confidence in the second, accountability. The decades long failure by the pentagon to comply with existing federal Financial Management laws is against the very spirit of the constitution. Our Founding Fathers demanded those spending taxpayer dollars are held accountable to the taxpayers, the people funding the bill. The Financial Management problems within the pentagon are intimately related to its problems of waste, mismanagement, its budget woes under sequestration, currently neither military leaders nor lawmakers can consistently and reliably identify what our defense programs cost. What they will cost in the future. Or what they have cost us in the past. When the pentagon itself does not know and cannot Tell Congress how its spending its money, good programs face cuts along with wasteful programs. That we will not need. Which is the same situation we find ourselves in today. Cutting meat instead of fat. Unreliable Financial Information makes it impossible to link the consequences of past decisions and, oh, by the way, Holding People accountable for those decisions, to the Defense Budget or measure whether or not the activities of the Defense Department are actually meeting military requirements. The problem is clear you cannot manage what you cannot measure. If the pentagon does not know how it spends its money, congress does not know how dod is spending its money. With the nations debt nearing 18 trillion and counting, and tighter budgets across the federal budget, dod needs now more than ever to better manage the scarce resources. The first charge of the congress is to defend the country. Today, dod leadership has told us that theyre on the right track, making progress. Ive heard that song before. Some of our nations best watchdogs, the gao and dod, i. G. , will testify that the core Financial Management weaknesses, the longstanding deficiencies, still exist and remain a significant risk to dod meeting its statutory, constitutional requirements. If you take away only one point today, it should be this. Poor Financial Management is the root cause of much of dods current problems. Be it the ability to control costs, as evidenced by weapons system and i. T. System overruns, anticipate its future costs, measure performance, or prevent waste, fraud and abuse. Congress best helps dod fulfill its obligations under the law and to the american taxpayers by holding dod accountable for its failure to comply with the law. Mr. Chairman, i have only one request of our first panel, as that you will stay and listen to the gao and ig. I know they seem to be a thorn, but theres some reality in what they say. And if we mix that reality with a good effort that everybody at this table right now is making im talking about our panelists well get closer. And i would just summarize, and well do it through the questioning, weve changed what the ndaa called for by going to the accounts instead of the resources. Understand you were allowed to do that. But if you really want Financial Data to be able to make good Financial Decisions and to control costs, youre not going to get it that way until maybe 2022, 2021. With that, i yield back. Let me just follow up on something that dr. Coburn just said. Hes urged you to stay if you can for the second panel. I would ask that you do that, as well. If for some reason you cant, please, for gods sake, make sure you have somebody senior whos going to be here dutifully taking notes. Jane, not so long ago, the deputy secretary of Homeland Security, as you may recall. And she would go meet with jean dadaro, the controller general not every week or every month, but just about and to talk with him face to face, the numbertwo person at hhs, to figure out how do they get how did the Homeland Security get off the high risk list for gao . And working it, working it, working it. Month in and month out. And finally, they did. They did. And as dr. Coburn said, some people think of the general accountability office, our watchdog, as a thorn in the side of agencies. They actually play constructive role, as you know. And they want you off the list. They want to have other things to focus on instead of the problems were going to be talking about here today. One of the items theyd like to get off the list, and so would i, is a major systems cost overruns which now exceeds i believe 400 billion. 400 billion. Plenty of work to do. Ill introduce briefly everybody. Mr. Hale, its not going to be a pleasant hearing, but having said that, we do appreciate your service. I know youll be stepping down later this year, and we appreciate your service and wish you only well as you go forward. But bob hale is the undersecretary and chief Financial Officer, the office of the department of defense. Mr. Hale was appointed to his current position in januar