Monday, September 8, 2008

DOD BUSINESS SYSTEMS MODERNIZATION: Planned Investment in Navy Program to Create Cashless Shipboard Environment Needs to Be Justified and Better Manag

Highlights of GAO-08-922, a report to the Subcommittee on Readiness and Management Support, Committee on Armed Services, U.S. Senate

GAO has designated the Department of Defense’s (DOD) multi-billion dollar business systems modernization efforts as high risk, in part because key information technology (IT) management controls have not been implemented on key investments, such as the Navy Cash program. Initiated in 2001, Navy Cash is a joint Department of the Navy (DON) and Department of the Treasury Financial Management Service (FMS) program to create a cashless environment on ships using smart card technology, and is estimated to cost about $320 million to fully deploy. As requested, GAO analyzed whether DON is effectively implementing IT management controls on the program, including architectural alignment, economic justification, requirements development and management, risk management, security management, and system quality measurement against relevant guidance.

What GAO Recommends
GAO recommends that investment of modernization funding in Navy Cash be limited until a basis for informed decision making is established, and that other program management weaknesses be corrected, as appropriate. DOD agreed with most of GAO’s recommendations and described actions underway or planned to address them, while FMS committed to supporting DON in implementing them. Both provided other comments that GAO addresses in the report.

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