The military’s new financial management reporting system is causing a financial crisis
- by admin
In a military financial report that’s been published in the Canadian Forces’ financial management system, the Department of National Defence says it is required to include an explanation of how it plans to address concerns about financial management and financial management accounting.
“We need to explain that the military’s financial management will be subject to the same audit procedures as all other government agencies,” said a June 14 document obtained by CBC News.
“If a significant change is made to the system, we will ensure that the changes are communicated clearly and in a way that will allow Canadians to understand the impact of the change and ensure it does not adversely impact their financial well-being.”‘
A significant change’The document says it will not be possible to amend the system for the foreseeable future.
“This will require significant changes to the current system that would require significant cost savings,” it said.
“This is a significant disruption to the military service of all service members and our national security, and a significant impediment to the implementation of the strategic plan.”
The document was obtained under Access to Information and was provided to CBC News by the Military Services Association of Canada.
The government’s own review into the financial management of the Canadian Armed Forces concluded that “the system is not functioning properly,” and the government “is still struggling to implement a system that can meet the operational needs of the military and its service members.”
The government is now trying to fix that system.
The military’s internal auditor said the changes the government proposed for the system were not acceptable.
“They don’t reflect the military system,” said the auditor.
“The financial management systems of all the services that are involved in the defence budget are the same.”
The auditor, which was hired by the government to audit the system and report back to the minister, said the government’s changes would “require significant cost reductions, potentially with the loss of hundreds of millions of dollars.”
The Auditor General’s Office also said it was concerned about “significant” changes being made to how the system was operated.
In a letter to Defence Minister Harjit Sajjan, the auditor said “significant changes” had been proposed to the accounting system for military departments.
“The changes would involve a significant cost reduction that would likely result in significant financial and operational disruption to many of the services,” the letter read.
“There are also significant risks that the system will be unable to provide accurate financial information to the Canadian taxpayer and that the financial information will be incorrect or incomplete, resulting in an inability to provide timely and accurate assessments of the government of Canada’s budgetary needs and responsibilities, and an inability of the Government of Canada to deliver on its obligations to Canadians.”
The audit report also said there was “no assurance that the new financial reporting requirements would not adversely affect the military financial system.”
The Department of Defence has not yet responded to CBC’s request for comment.
The auditor general is now reviewing the changes made to financial management by the Defence Department.
In a military financial report that’s been published in the Canadian Forces’ financial management system, the Department of National Defence…
- Which of the big US financial companies can you get your hands on?
- What you need to know about APEX Financial’s new AMP-backed products
- Why you should be more invested in Haverdink
- Financial managers are more likely to take their own money
- How to Secure Financial Management Companies Without Going to Jail (PDF)