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DOD Financial Management: Improvements Needed in the Navys Audit Readiness Efforts for Fund Balance with Treasury

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Technical Report

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U.S. Government Accountability Office Washington United States

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The National Defense Authorization Act for Fiscal Year 2014 mandates an audit of DODs fiscal year 2018 department-wide financial statements. To help achieve this, the DOD Comptroller issued the FIAR Guidance to provide a standard methodology for DOD components to follow to improve financial management and achieve audit readiness, and designated the SBR as an audit priority. Full implementation of the Navys General Fund FIP for FBWT is essential to achieving audit readiness for its General Fund SBR. The Navy asserted Statement of Budgetary Activity SBA audit readiness as of September 30, 2014, and in February 2016 received a disclaimer of opinion on the audit of its SBA for fiscal year 2015. GAO is mandated to audit the U.S. governments consolidated financial statements, which cover activities and balances of executive branch agencies, including DOD. GAOs objective in this report was to determine the extent to which the Navy developed and implemented the Discovery phase of its General Fund FBWT FIP in accordance with the FIAR Guidance. GAO analyzed the Navys FBWT FIP to determine whether it contained the tasks and activities required by the FIAR Guidance for the Discovery phase. GAO also reviewed the Navys FBWT FIP key deliverables, such as process narratives and flowcharts, internal control assessments, and test results

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