Thursday, May 10, 2007

Iraq Financial Benchmarks Needed

While all of Washington is embroiled in whether or not to fund the troops and for how long, the entire discussion misses the point.

As Defense Secretary Gates admitted, the Department of Defense can't keep track of the money at all.

Secretary Gates:
A two-month appropriation assumes that the Department of Defense, first of all, has a precise idea, in real time, of the balances in thousands of accounts that we have to manage.

In truth, I essentially have 10,000 faucets all running money. And some of them run at one rate; some of them run at another. And they all draw on one big pool of money behind them.

Turning them on and off with precision and on a day-to-day basis or even a month-to-month basis, gets very difficult. I think the bill – the proposal – also assumes financial and cash flow controls, a precision in those controls, day-to-day would require a degree of agility that is not normally associated with the Department of Defense.

While I realize Mr. Gates did not create this problem, and that it has a long history before him, for the DOD to be this incompetent when it comes to money, this is unacceptable.

Imagine a business leader not being able to assess cash flow! What would the SEC say to a company that can't file its quarterly reports? How would Wall Street handle that?

When NYC crime was out of control, Giuliani demanded daily reporting on crime stats and locations. He was told it could not be done. So, he found someone they said he could do it, put him in charge, and he did it.

And then every single day, they evaluated every single one of those reports and allocated resources accordingly. And it worked. Crime came down.

As unlike most political appointments Mr. Gates has been for this Administration, and as entrenched as these problems are, this is a job he simply must do: get the money under control.

I met someone who recently came back from several years of doing humanitarian work in Iraq at church on Sunday. He told me that one of the key areas of frustrations for Iraqis is that they know there are all these millions of dollars around them, and nothing to show for it.

The cash burn rate over there is extremely high, and it's not being tied to results. He spoke of projects that were 1% complete with more than 75% of the money spent!

The "benchmarks" Congress needs to be talking about aren't military but financial.
How about some financial accountability with how this money is spent, no matter how much is appropriated and how long it's intended to last.

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