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DOD Financial Management: Improvement Needed in DOD Components' Implementation of Audit Readiness Effort
GOVERNMENT ACCOUNTABILITY OFFICE WASHINGTON DC
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The Department of Defense DoD has been required to prepare audited annual financial statements since 1997, but to date it has not been able to meet this requirement. The National Defense Authorization Act of Fiscal Year 2010 mandated that DoD be prepared to validate certify that its consolidated financial statements are audit-ready by September 30, 2017. In May 2010, DoD issued its Financial Improvement and Audit Readiness FIAR Guidance to provide a methodology for DoD components to follow to develop and implement their Financial Improvement Plans FIPs for achieving audit readiness. The DoD FIP is a framework for planning and tracking the steps and supporting documentation. GAO was asked to assess the FIP methodology provided in the FIAR Guidance, the development and implementation of selected components FIPs, and DoDs monitoring and oversight of the FIP process. To do this, GAO analyzed the FIAR Guidance and reviewed two selected FIPs Navy Civilian Pay and Air Force Military Equipment. The reviews of the FIPs included a review of relevant documentation and interviews with DoD and component officials. GAO recommends that the Secretary of Defense take various actions to improve the development, implementation, documentation, and oversight of DoDs financial management improvement efforts. DoD generally concurred with the recommendations and commented on actions being taken to implement them.
APPROVED FOR PUBLIC RELEASE