To set forth consequences for the failure of the Department of Defense to obtain audits with an unqualified opinion on its financial statements by fiscal year 2017.

1. Adds SEC. 903. FAILURE OF THE DEPARTMENT OF DEFENSE TO OBTAIN AUDITS WITH AN UNQUALIFIED OPINION ON ITS FINANCIAL STATEMENTS BY FISCAL YEAR 2017 at the end of subtitle A of title IX

   Adds a section

   In S. 3254 · Placed on Calendar Senate

   "(2) If a House of Congress adopts a bill authorizing or appropriating funds for the National Nuclear Security Administration for nuclear stockpile and stockpile stewardship program activities or other activities that, as determined by the Council, provides insufficient funds for such activities for the period covered by such bill, the Council shall notify the congressional defense committees of the determination.".

   Inserted: SEC. 903. FAILURE OF THE DEPARTMENT OF DEFENSE TO OBTAIN AUDITS WITH AN UNQUALIFIED OPINION ON ITS FINANCIAL STATEMENTS BY FISCAL YEAR 2017.

   Inserted: If the Department of Defense fails to obtain an audit with an unqualified opinion on its financial statements for fiscal year 2017, the following shall take effect, effective as of the date of the issuance of the opinion on such audit:

   Inserted: (1) Reorganization of responsibilities of chief management officer.--

   Inserted: (A) Position of chief management officer.--Section 132a of title 10, United States Code, is amended to read as follows:

   Inserted: "Sec. 132a. Chief Management Officer

   Inserted: "(a) In General.--(1) There is a Chief Management Officer of the Department of Defense, appointed from civilian life by the President, by and with the advice and consent of the Senate.

   Inserted: "(2) Any individual nominated for appointment as Chief Management Officer shall be an individual who has--

   Inserted: "(A) extensive executive level leadership and management experience in the public or private sector;

   Inserted: "(B) strong leadership skills;

   Inserted: "(C) a demonstrated ability to manage large and complex organizations; and

   Inserted: "(D) a proven record in achieving positive operational results.

   Inserted: "(b) Powers and Duties.--The Chief Management Officer shall perform such duties and exercise such powers as the Secretary of Defense may prescribe.

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   Inserted: "(c) Service as Chief Management Officer.--(1) The Chief Management Officer is the Chief Management Officer of the Department of Defense.

   Inserted: "(2) In serving as the Chief Management Officer of the Department of Defense, the Chief Management Officer shall be responsible for the management and administration of the Department of Defense with respect to the following:

   Inserted: "(A) The expenditure of funds, accounting, and finance.

   Inserted: "(B) Procurement, including procurement of any enterprise resource planning (ERP) system and any information technology (IT) system that is a financial feeder system, human resources system, or logistics system.

   Inserted: "(C) Facilities, property, nonmilitary equipment, and other resources.

   Inserted: "(D) Strategic planning, and annual performance planning, and identification and tracking of performance measures.

   Inserted: "(E) Internal audits and management analyses of the programs and activities of the Department, including the Defense Contract Audit Agency.

   Inserted: "(F) Such other areas or matters as the Secretary of Defense may designate.

   Inserted: "(3) The head of the Defense Contract Audit Agency shall be under the supervision of, and shall report directly to, the Chief Management Officer.

   Inserted: "(d) Precedence.--The Chief Management Officer takes precedence in the Department of Defense after the Secretary of Defense and the Deputy Secretary of Defense.".

   Inserted: (B) Conforming amendments.--

   Inserted: (i) Section 131(b) of title 10, United States Code, is amended--

   Inserted: (I) by striking paragraph (3);

   Inserted: (II) by redesignating paragraph (2) as paragraph (3); and

   Inserted: (III) by inserting after paragraph (1) the following new paragraph (2):

   Inserted: "(2) The Chief Management Officer of the Department of Defense.".

   Inserted: (ii) Section 132 of such title is amended--

   Inserted: (I) by striking subsection (c); and

   Inserted: (II) by redesignating subsections (d) and (e) as subsections (c) and (d), respectively.

   Inserted: (iii) Section 133(e)(1) of such title is amended by striking "and the Deputy Secretary of Defense" and inserting ", the Deputy Secretary of Defense, and the Chief Management Officer of the Department of Defense".

   Inserted: (iv) Such title is further amended by inserting "the Chief Management Officer of the Department of Defense," after "the Deputy Secretary of Defense," each place it appears in the provisions as follows:

   Inserted: (I) Section 133(e)(2).

   Inserted: (II) Section 134(c).

   Inserted: (v) Section 137a(d) of such title is amended by striking "the Secretaries of the military departments," and all that follows and inserting "the Chief Management Officer of the Department of Defense, the Secretaries of the military departments, and the Under Secretaries of Defense.".

   Inserted: (vi) Section 138(d) of such title is amended by striking "the Secretaries of the military departments," and all that follows through the period and inserting "the Chief Management Officer of the Department of Defense, the Secretaries of the military departments, the Under Secretaries of Defense, and the Director of Defense Research and Engineering.".

   Inserted: (C) Clerical amendment.--The table of sections at the beginning of chapter 4 of such title is amended by striking the item relating to section 132a and inserting the following new item:

   Inserted: "132a. Chief Management Officer.".

   Inserted: (D) Executive schedule.--Section 5313 of title 5, United States Code, is amended by adding at the end the following:

   Inserted: "Chief Management Officer of the Department of Defense.".

   Inserted: (E) Reference in law.--Any reference in any provision of law to the Chief Management Officer of the Department of Defense shall be deemed to refer to the Chief Management Officer of the Department of Defense under section 132a of title 10, United States Code (as amended by this paragraph).

   Inserted: (2) Jurisdiction of dfas.--

   Inserted: (A) Transfer to department of the treasury.--Jurisdiction of the Defense Finance and Accounting Service (DFAS) is transferred from the Department of Defense to the Department of the Treasury.

   Inserted: (B) Administration.--The Secretary of the Treasury shall administer the Defense Finance and Accounting Service following transfer under this paragraph through the Financial Management Service of the Department of the Treasury.

   Inserted: (C) Memorandum of understanding.--The Secretary of Defense and the Secretary of the Treasury shall jointly enter into a memorandum of understanding regarding the transfer of jurisdiction of the Defense Finance and Accounting Service under this paragraph. The memorandum of understanding shall provide for the transfer of the personnel and other resources of the Service to the Department of the Treasury and for the assumption of responsibility for such personnel and resources by the Department of the Treasury.

   Inserted: (D) Construction.--Nothing in this paragraph shall be construed as terminating, altering, or revising any responsibilities or authorities of the Defense Finance and Accounting Service (other than responsibilities and authorities in connection with the exercise of jurisdiction of the Service following transfer under this paragraph).

   Original wording

   At the end of subtitle A of title IX, add the following:

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As printed