A Proposal to Emphasize Managerial Cost Accounting in the Department of Defense
Armed Forces Comptroller (Journal of the American Society of Military Comptrollers) Vol. 57, No. 2, Spring 2012, pgs. 34-39.
The “Review the Bidding” paper ends with a call for the DoD to seek permission from Congress to move away from the pursuit of CFO-Act financial statements in order to pursue new accounting initiatives better suited to support the underlying “improve- efficiency-effectiveness-and-fiscal-responsibility” objectives of the CFO Act. To that end, it proposes that the DoD should expand its use of managerial cost accounting, but done in a way that recognizes the primacy of the budget process (development, approval, allocation, and execution) as the “financial” process that drives and sustains everything the Department does. This paper expands on that idea by first reviewing how much managerial cost accounting the Department is already doing (not very much), and then by describing how, by directly tying into the budget process, a new form of managerial “obligation” accounting could be done that would deliver the “accountability” that everyone, both inside and outside the Department, has been seeking.
[The American Society of Military Comptrollers (ASMC) changed its name to the Society of Defense Financial Management (SDFM) in May 2024.]
