The Air Force’s Defense Enterprise Accounting and Management System (DEAMS) is 7.5 years behind schedule and its original lifecycle cost estimate has more than quintupled to over $2 billion, according to the Defense Department’s director, operational test & evaluation (DOT&E) office.

In its fiscal year 2012 annual report to Congress, DOT&E said DEAMS could already be the target of fraud or theft due to inconsistent telecommuting policies, information assurance (IA) vulnerabilities, inadequate control of budget targets and large account imbalances.

DOT&E also said DEAMS is neither operationally effective nor operationally suitable with many key features that do not work, while other features require subject matter experts intervening to function. DEAMS is also neither making sufficient progress toward achieving audit readiness of the Statement of Budgetary Resources (SBR) by the end of 2014, nor toward achieving full financial auditability by the statutory deadline of Sept. 30, 2017, DOT&E said.

DEAMS is a Major Automated Information System that uses commercial-off-the-shelf (COTS) Enterprise Resource Planning (ERP) software to provide accounting and management services. The Air Force said DEAMS covers a wide area of business processes such as: collections, obligations, cost accounting, purchase requests, receipt and acceptance, analysis and decision support, time and attendance management, accounts payable and disbursement and customer order and billing, among others.

DOT&E said U.S. Transportation Command (TRANSCOM) and Air Force financial managers will use DEAMS to compile and share financial management data and information across TRANSCOM and the USAF.

Accenture [ACN] is the contractor for DEAMS. Accenture spokeswoman Joanne Veto said yesterday in a statement the company has worked, and continues to work, collaboratively with the Air Force to understand and correct issues identified through audits and assessments. Veto said following a DOT&E operational assessment (OA) report on DEAMS in September DEAMS went live at McConnell AFB, Kansas. She added that following the OA report DEAMS completed a successful year-end close that included a full trial balance validation and assertion by DFAS departmental.

Veto said DEAMS in fiscal year 2012 processed more than $9 billion in billings and cash collections and processed over 30,000 invoices resulting in more than $3.5 billion in payments.

DOT&E also found that DEAMS is unable to match accounts payable or accounts receivable, reconcile subsidiary accounts to the general ledger (none reconciled), perform end-of-the-year accounting closeouts nor balance appropriation accounts accurately with Treasury Department appropriation accounts. DOT&E found, however, that DEAMS successfully ages and liquidates accounts receivable, capitalizes and depreciates assets when full information is available and processes only valid data.

DEAMS also successfully performs some decision support functions such as budget management within authority and funds distribution and loading, DOT&E found. However, DEAMS does not adequately perform budget analysis and planning, decision analysis, balancing the general ledger, not exceeding budget control targets, and generating accurate reports. DOT&E said many users rely on legacy systems to create reports.

DOT&E suggested the Air Force conduct immediate “Financial Red Team” penetration testing to assess DEAMS’ fraud and theft vulnerabilities as well as test IA risks associated with telecommuting. The Air Force should also recreate a realistic development test environment to prevent the accrual of new deficiencies.

DOT&E also suggested the Air Force halt DEAMS deployments until “substantial progress” is made addressing the system’s deficiencies.

The Air Force was unable to respond to requests for comment by deadline.

DEAMS is not the first Air Force ERP software endeavor to break the bank. The service in 2012 canceled its Expeditionary Combat Support System (ECSS), an effort to globally view, standardize and manage logistics resources to help close process gaps and use ERP software to more efficiently manage logistics like end items, materiel and people. The Air Force canceled ECSS after spending $1 billion on the program without apparently producing any significant military capability (Defense Daily, Dec. 11).