Defense Agency Initiatives (DAI) - Financial System

The Defense Agencies Initiative (DAI) - Financial System is a Department of Defense (DoD) enterprise resource planning (ERP) program managed by the Defense Logistics Agency (DLA). Its primary goal is to provide a standardized, auditable, and Chief Financial Officer (CFO) Act-compliant business environment for Defense customer organizations. The program leverages commercial off-the-shelf (COTS) software, specifically Oracle e-Business Suite, to deliver accurate, timely, and authoritative financial data. DAI supports the modernization and streamlining of financial management processes across more than 30 Defense agencies, field activities, and non-Service organizations. This ultimately improves financial decision support, audit readiness, and compliance with federal requirements.

The objectives of the DAI program are centered on deploying a unified financial management system that replaces multiple legacy, non-compliant systems. This system supports key DoD business processes such as Cost Management, Budget to Report (B2R), Procure to Pay (P2P), Acquire to Retire (A2R), Hire to Retire (H2R), Order to Cash (O2C), and Proposal to Reward (P2R). DAI is designed to comply with the DoD Business Enterprise Architecture (BEA), Standard Financial Information Structure (SFIS), Standard Line of Accounting (SLOA), and Office of Federal Financial Management (OFFM) requirements. The program also incorporates Governance, Risk, and Compliance (GRC) capabilities to support audit readiness and address material weaknesses in financial reporting.

DAI Increment 3 is the current focus of development and fielding, building on previous increments that are now in sustainment. Increment 3 delivers new financial capabilities, including Defense Working Capital Fund (DWCF) and Re-Sale accounting for the Defense Commissary Agency, as well as major application upgrades. The program follows an evolutionary and incremental acquisition strategy, with annual software releases to accommodate regulatory changes and new requirements.

In FY 2024, DAI achieved several milestones, such as deploying Release 6, expanding Time and Labor capabilities to U.S. Cyber Command, updating the United States Standard General Ledger (USSGL), and implementing Enterprise Performance Management (EPM) for budget formulation.

Planned activities for FY 2025 and FY 2026 include migrating from DISA on-premises hosting to commercial cloud environments, stabilizing USSGL updates, onboarding new agencies such as USTRANSCOM, and deploying subsequent software releases (Release 7, 8, and 9). The program will continue to support ongoing audits, maintain application user licenses, resolve critical software errors, and expand the use of Robotic Process Automation (RPA) to improve data accuracy and resource utilization.

DAI will also conduct BEA compliance assessments, support Identity Credential Access Management (ICAM), and integrate G-Invoicing capabilities to meet Office of the Secretary of Defense (OSD) reform initiatives.

Program management and support are provided by DLA Acquisition (J7) as the Milestone Decision Authority, DLA Information Operations (J6) as the Program Executive Office, and the DAI Program Management Office (PMO) as the systems integrator. The PMO coordinates with DISA for hosting and continuity of operations, and with the Joint Interoperability Test Command (JITC) for interoperability and performance testing. The program relies on a mix of government and contractor support for application development, requirements management, testing, training, deployment, and sustainment. Funding covers licenses, maintenance, hardware, and support services necessary for ongoing development and operational sustainment.

Benefits and justifications for the DAI program include labor efficiencies through data entry standardization, reduction of contractor support, improved financial visibility with real-time data access, enhanced agility and resilience, retirement of legacy systems, and employment of federal and DoD enterprise data standards. The program has consistently received unmodified audit opinions, demonstrating strong internal controls and regulatory compliance. DAI's integrated approach reduces data reconciliation requirements, enhances analysis and decision support capabilities, and supports the DoD's strategic financial management goals, such as optimizing taxpayer dollars and empowering data-driven decision making.