Advana updates left out of annual Pentagon financial report as major transition emerges

Just before a major transition and for the first time since Advana’s inception, the Pentagon’s Agency Financial Report for fiscal 2025 excludes any mention or performance-related information about the widely-used data analytics and AI platform.

The reviewers’ decision to omit Advana updates from last year’s report raises new questions about the tool’s efficacy, as officials move to reshape its underpinning program via a broader push to help the agency achieve a clean financial audit. 

“The Department of Defense has been very public in previous AFRs about the integration of Advana,” said Virginia Burger, a senior defense policy analyst at the Project on Government Oversight. “What’s included matters, but what is omitted is just as important — and something we should pay equal attention to.”

Advana is a mash-up of two words: advancing analytics.

In its current form, it marks a digital warehouse and system that supplies the military, defense officials and their approved users with decision-support analytics, visualizations and other data-driven assets. 

Its roots grew out of the department’s chief financial officer’s unit, back when personnel needed to pull data from thousands of disparate business systems that were not interoperable at the time. In 2021, Booz Allen Hamilton won a five-year, $647 million contract to expand the program. 

Defense leaders under the Biden administration announced plans in 2024 to possibly award follow-on contracts — and ultimately fund up to $15 billion to multiple companies over the following decade. But early into President Donald Trump’s second administration last year, the Pentagon placed an indefinite pause on the Advana re-compete, resulting in much uncertainty about the data hub’s future.

This month, Defense Secretary Pete Hegseth and his team unveiled a slew of new policies to accelerate the military’s purchasing and adoption of artificial intelligence and other technologies. The guidance includes directions for a “critical transformation of Advana” and accompanying launch of a new War Data Platform. 

“Created during President Trump’s first administration, the Advana program has become a cornerstone of the department’s efforts to exploit our extensive data assets — not just for enterprise efficiency but for military advantage,” Deputy Defense Secretary Stephen Feinberg wrote in a Jan. 9 memo. “However, the evolution of Advana’s data platform and application ecosystem over the last six years has led to a complex technical and programmatic architecture that we now must rationalize in order to capitalize on the full potential of AI and support warfighting, intelligence, and enterprise needs with the speed, security, and auditability required.” 

Under the plan, Advana’s financial management elements are to be transferred back to the comptroller’s office, while the Pentagon’s Research and Engineering directorate will retain operational control of the platform.

“As part of their effort to expand the core WDP for warfighting and intelligence missions, the [Chief Digital and AI Office] and Chief Data Officer will also work closely with the department’s Deputy Chief Financial Officer to prioritize ingestion, consolidation, and quality assurance of the department’s financial, acquisition, logistics, and readiness data pipelines to accelerate progress toward achieving a clean FY27 [Defense Working Capital Fund] audit and clean FY28 agency-wide audit,” Feinberg wrote.

DOD has struggled immensely with auditability in recent years, largely due to challenges with fragmented data across heaps of disparate business and financial systems. 

Yet each Agency Financial Report between fiscal years 2019 and 2024 discussed Advana-related actions and activities that were contributing to the department’s progress toward a suitable audit. 

Reviews from fiscal 2022 and 2023, for instance, state how an IT roadmap in the Advana system enabled DOD to identify and retire outdated, non-compliant systems that were relevant to internal controls over financial reporting. 

Among other updates from the fiscal 2024 AFR, the report reveals that the Pentagon was “using Advana to track all contingency reporting, evaluating current circumstances to estimate potential future DOD liabilities,”and that officials aimed to use the platform for “new contingency reporting going forward to include military [operations] carried out by the United States Armed Forces in response to threats, including natural disasters, terrorists, or subversives.”

Taken collectively, those reports cover Advana’s extensive integration across the Pentagon for decision-making and financial management as it matured.

Unlike reviews from the years prior, the fiscal 2025 AFR does not reference Advana. 

And instead of a section entitled “Audit Overview” that’s typically in the portion on management’s discussion and analysis, the latest AFR includes a “Strategic Overview.” 

That report notably warns that DOD’s “failure to modernize the financial management systems environment increased the risk” of the department not being able to produce accurate, reliable, and timely financial management information necessary to achieve an unmodified audit opinion.

In response to questions from DefenseScoop this week, a senior department official said “the absence of specific Advana updates in the FY2025 AFR is a result of aligning the [management’s discussion and analysis portion] with the new Statement of Federal Financial Accounting Standard (SFFAS) 64,” referencing a 2024 change to U.S. government guidance on federal reporting requirements.

“This is part of a strategic effort to be more concise and provide updates by the department’s major programs,” they noted.

The senior department official did not provide additional comments regarding transparency concerns amid Advana’s forthcoming trifurcation. 

However, on the platform’s current performance capacity, they also confirmed that the fiscal 2025 System and Organization Controls 1 (SOC-1) audit on Advana “was adverse and [officials] are working to remediate the control deficiencies identified in the report.”  

SOC-1 reviews broadly evaluate whether organizations’ operations and controls are designed and functioning reliably to protect client data and ensure accurate financial statements. Those audits inform the DOD comptroller’s Agency Financial Reports each year, and the Advana team has also spotlighted positive results in the past. 

“Since SOC-1 reports contain sensitive details on system processes, internal controls, and data security, the resulting report and findings are specified as Controlled Unclassified Information (CUI) and are not approved for public release,” the senior department official said when asked for a copy.

Meanwhile, in Burger’s view, the exclusion of any Advana mentions in the 2025 AFR could suggest “a possible schism in how the department wants to publicize their use of the platform” as the transition announcement was approaching.

“A previously touted and clearly integrated program like Advana going unmentioned in the AFR after appearing in the seven previous ones is an indication that there has been some kind of shift in how the Department is approaching this major software system,” she told DefenseScoop. “Questions should be asked — by the press and Congress — especially as the department continues to shout about its integration of AI and advanced technology. Why not continue to use and enhance the program you already have? Or, if it’s failing you, why not publicly acknowledge that to show your willingness to change and adapt as inefficiencies and programmatic failures are identified?”

This is all happening as the department is hustling to rapidly integrate AI in what Burger referred to as “flashy and publicized ways — with posters plastered across Pentagon spaces, events with tech CEOs highlighting the integration of the software, and countless announcements and insistence that AI become integral to day-to-day operations across the force.” 

There’s a chance, she warned, that Advana has become increasingly complex and inefficient the more it has been embedded into the morass of daily missions across the behemoth department.

Despite the transparency concerns, it’s also notable that the AFR is a public-facing document.

“While it serves an oversight purpose, it is also selective. The department can use it as a tool to choose what and how they highlight specific tools, focus areas, and capabilities across their financial and audit efforts. At the end of the day, barring any Congressionally mandated reporting requirements, the AFR is influenced by the needs, biases, and preferences of the department and how the senior leadership of the day wants to portray themselves,” Burger said.