Risks in Using Spreadsheets and ERP systems to manage Government Property
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Recently, the national CPA firm Dixon Hugh Goodman organized a webinar called “Government Property Management – the Forgotten System” together with E-ISG Asset Intelligence. Hundreds of people attended this webinar. In fact, the popularity of this webinar far exceeded our expectation.
Government Property Management is one of the 6 business systems a government contractor (a DoD contractor specifically) is required to have, and is subject to audit from DCMA. However, a lot of the attention has been paid to the cost and financial systems, such as procurement, earned value. The Government Property Management system is sort of forgotten.
That’s why the webinar received so much attention.
Attendees to the webinar were briefly surveyed. The survey results speaks volume on the lack of attention to this subject matter:
- When asked the question “Do you believe you know where every item of Government Property is, with good records to show an Auditor?”, only 47% of the participants says “yes”, and more than half of the participants said “I sure hope so”, or “No”.
- Most of the audience (58%) indicated that they either use ERP asset management module or excel sheets to manage government property.
Spreadsheets and ERP systems are not adequate for managing Government Property. There are many limitations, including:
- Spreadsheets can’t keep track of the entire history of assets
- While many ERP systems have a Materials module, most are not optimized to manage Property through the full lifecycle
- Physical inventory using Excel files usually means printing out a file, verifying inventory compared to the records, then updating manually later – very prone to error
- Spreadsheets can’t regularly monitor the loss rates, shortages and overages for a contract
These limitations, and more, present high risks for government contractors. They may not be able to meet the requirements for managing government property (Government Furnished Property and Contractor Acquired Property) as defined by FAR/DFARs. Failure to meet the requirements can cause payment withholding or loss of eligibility for bidding on a contract.
If you want to understand in more detail why Spreadsheets and ERP systems are not adequate for managing Government Property, you can request out latest white paper “Spreadsheets or ERP systems – why they are inadequate for Government Property Management” by clicking here. This white paper provides the detailed analysis on the risks from using spreadsheets or ERP systems in each of the 10 outcomes from Government Property Management system.