Accession Number : ADA548889
Title : Defense Finance and Accounting Service Needs to Improve Controls Over the Completeness and Accuracy of the Cash Management Report
Descriptive Note : Audit rept.
Corporate Author : INSPECTOR GENERAL DEPT OF DEFENSE ARLINGTON VA
Personal Author(s) : Frontz, Amy J
Report Date : 15 Aug 2011
Pagination or Media Count : 35
Abstract : We assessed the completeness and accuracy of the Cash Management Report. This is the first of two reports relating to the reconciliation of Fund Balance with Treasury for the Other Defense Organizations (ODOs). As of September 30, 2009, DoD reported $80.3 billion in Fund Balance with Treasury on the ODO General Fund Balance Sheet. The DoD IG found that the Cash Management Report was not complete or accurate. Specifically, the Director, Defense Finance and Accounting Service (DFAS) Indianapolis did not attribute approximately $10.5 billion in transactions to the ODO responsible for reconciling and accounting for the transactions. This occurred for the following reasons: DFAS Indianapolis did not properly research and resolve variances on a regular and recurring basis, ODO submitters did not always report transactions to DFAS Indianapolis with valid lines of accounting, and DFAS Indianapolis did not establish a process for communicating with the ODO submitters. As a result, the ODOs reconciled their Fund Balance with Treasury general ledger accounts to the Cash Management Report, which in aggregate did not match the amounts reported by the U.S. Treasury. Because the ODOs must rely on the amounts on the Cash Management Report as a control total for reconciling to the U.S. Treasury, these unreconciled variances seriously undermine the reliability of the Cash Management Report as a reconciliation tool and impede the auditability of the ODO Fund Balance with Treasury accounts. This has a significant negative effect on an ODO's ability to obtain a favorable financial statement audit opinion unless adequate compensating controls are implemented. DFAS Indianapolis addressed some of the deficiencies identified during this audit.
Descriptors : *ACCURACY , *DEFICIENCIES , *DEPARTMENT OF DEFENSE , *FINANCIAL MANAGEMENT , *MANAGEMENT PLANNING AND CONTROL , *MONEY , *REPORTS , AUDITING , RELIABILITY
Subject Categories : Administration and Management
Economics and Cost Analysis
Military Forces and Organizations
Distribution Statement : APPROVED FOR PUBLIC RELEASE