Improving the Defense Finance and Accounting Service's by Edward Keating

By Edward Keating

The safeguard Finance and Accounting provider (DFAS) presents a number of finance and accounting prone to army clients. simply because DFAS got patron lawsuits, its management requested RAND to take a complete examine all DFAS-customer interactions to spot difficulties and ensure how these interactions will be greater.

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The NULO and UMD balances are snapshots of how many dollars are currently in these categories. The balances of both categories evolve over time as problems are resolved and new difficulties are encountered. The actual problem disbursements may have occurred months (or years) earlier, but have yet to be unraveled. 2 show that the balances of both NULOs and UMDs have fallen, DFAS-wide, in recent months. A declining balance suggests that a greater dollar value of NULOs/UMDs has been rectified than has been generated in the last month.

The Web might address two specific accounting concerns. First, rapid posting of disbursement information in accounting systems on the Web would increase the timeliness and value of DFAS accounting information. Second, such early posting might allow quicker recognition, and hence solution, of data problems. The sooner customers can view their information, the sooner, one hopes, steps can be taken to rectify errors. Of course, the sensitivity of DFAS’s information is such that extreme care must be taken to preserve the security of the system.

Outsourcing firms fear losses in other areas as well. The nature of outsourcing creates a dependence on the provider firm, with a consequent loss of independence (Petrie, May 15, 2000; Antonucci, Lordi, and Tucker, 1998). The 49 outsourced department is no longer readily available for use in management training, preventing the creation of easy familiarity with that function (Petrie, May 15, 2000; EIU/AA, 1995). A number of concerns relate to the nature of the outsourcing relationship. First, there is a concern that, over time, outsourcing providers will demand ever great premiums (EIU/AA, 1995).

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