Environmental liabilities are probable and measurable estimates of future environmental cleanup, closure, and disposal costs. DoD has been unable to provide complete and auditable information on its environmental liabilities due to lack of standardized data and business processes across the Department. As a result, DoD's financial statements are not auditable.
To improve environmental liabilities' reporting, DoD's environmental and financial subject matter experts reengineered the business process, collaboratively developing a "To-Be" process model and standard enterprise architecture to recognize, value, and report environmental liabilities. The architecture—comprised of process models, logical data models, and business rules—provides a blueprint the Military Departments can follow to modernize their environmental liabilities' systems and processes.
Office of the Secretary of Defense (OSD) is currently working with the Military Departments to integrate the reengineered business processes and data elements into their information technology systems and overall operations. This initiative will enable DoD to provide timely, authoritative, and auditable environmental liability data—reconciled with asset records—for improved financial statement reporting.
More credible environmental liabilities reporting, supported by consistent business processes and clean audits, will help DoD demonstrate to Congress and the American people that it is an able steward of environmental resources.
For more information, see the Environmental Liabilities Recognition, Valuation, and Reporting Requirements documents located in the BEI Library.
