How preparing for an audit helped DOD’s COVID-19 response

As details of the Department of Defense (DOD) budget request for the fiscal year that begins October 2021 are about to be released to Congress and the public, those skeptical of the nation’s investment in its security continue to ask why the DOD funding request should be supported when it can’t pass an audit.

It’s true that the Defense Department has not yet passed a comprehensive full financial statement audit examining at one time everything it owns and owes. But defense has been subject to hundreds of individual audits each year — each scrutinizing specific programs, contracts and payments. 

The big story today is that the comprehensive full financial statement audit, which started in 2018, has revolutionized the way DOD looks at data. The resulting changes save time and money while improving the availability of reliable information for management, decisionmaking and crises response.

To prepare for this comprehensive financial audit, defense leadership decided to go beyond what is usually required to obtain a “clean opinion.” It decided to create a way to strengthen financial management practices and gather all its information into a single source of truth that could translate and standardize data from disparate origins and convert it into a usable format for managers and decisionmakers. 

As part of this effort, the department recruited creative and talented experts in data sciences and software engineering to do the complicated work of consolidating, translating and standardizing data from hundreds of systems across DOD.

The result became Advana, (Advancing Analytics), a tool that expands the boundaries of a standard data warehouse and provides timely and easy access to large data sets. Defense officials are now applying this new analytics tool to all defense data, not just financial data. Advana can be queried to provide reliable defense performance, personnel, logistics, property, procurement, contracting and readiness data and has analytical, visualization and other tools to help leaders understand and use the information. 

When the pandemic happened, Advana quickly became DOD’s single immediate provider of accurate data.

By January 2020, it was already clear that the Defense Department would play a sizable role in the COVID response. Because a large-scale crisis is ultimately a complex data problem, and COVID was no exception, the Advana system provided DOD with a tool to analyze and use the vast amounts of data necessary for the COVID response.

DOD is huge. It manages more than $3 trillion in assets and is one of the nation’s largest employers, with approximately 2.1 million uniformed personnel and 770,000 civilians. The defense workforce is globally deployed and operates in more than 4,600 sites worldwide. To effectively respond to the pandemic, the department needed real-time data and reports, and the ability to monitor activities and people in a central location and in a consistent format. 

Specifically for COVID, DOD officials needed to understand case counts, bed availability, testing results, workforce capacity, hospitalization projections, supply chain orders and vaccine distribution inside and outside the Defense Department network. In other words, it needed to have a cross-functional and organizational view of people, places, dollars and things to be able to determine risk and response — the same type of information required for a financial audit.

Advana allowed senior defense leaders to deliver data-driven action, and the ability to manage assets and performance without lengthy, non-repeatable and often unreliable calls for data.

The department no longer had to struggle with time-consuming, unconnected, unreliable manual processes. Advana enabled officials to quickly link the entire department’s mission to combat COVID with specific events to execute that mission. With a few clicks, a user could see every research and development contract supporting DOD’s response to the pandemic. An accessible visualization option would enable one to follow the latest funding and delivery schedule for Moderna, Pfizer and other vaccines.

The COVID effort has highlighted the importance of a cross-functional and organizational operating picture for senior-level decisionmakers. The Defense Department’s response to this pandemic – like the country’s – will be reviewed by Congress, the Government Accountability Office, the Defense inspector general and the public. Because previous audit preparations forced data standardization and control, the Defense Department was able to make better informed COVID-related decisions.

This focus on tools to consolidate, use and analyze all the department’s information will support responses to future crises. Management improvements, saving money and the positioning of the largest federal department for a positive game-changing shift are already evident.

Rather than being used as an excuse to criticize the DOD and its budget, the comprehensive full financial statement audit should be seen for what it really is. The impetus for the creation of an excellent system that uses the vast trove of information the department possesses to support accurate and speedy decisionmaking, management and transparency. 

Elaine McCusker is a resident fellow at the American Enterprise Institute. She is a former acting under secretary of defense (Comptroller).