DOD Financial Management: The Army Faces Significant Challenges in Achieving Audit Readiness for Its Military Pay
GOVERNMENT ACCOUNTABILITY OFFICE WASHINGTON DC
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The Defense Finance and Accounting Service-Indianapolis DFAS-IN reported that fiscal year 2010 active Army military payroll totaled 46.1 billion. However, for several years, GAO and others have reported continuing deficiencies with Army military payroll processes and controls, raising questions about the validity and accuracy of reported Army military pay and whether it is auditable. The Department of Defense DoD has recently accelerated its Statement of Budgetary Resources audit readiness goal by 3 months to 2014 and is required to achieve audit readiness for a full set of DoD financial statements by 2017. GAO performed basic audit procedures for the Armys active duty military payroll to assess the Armys ability to do the following 1 identify a valid population of payroll transactions, and 2 test a sample of payroll transactions for validity and accuracy. GAO reviewed applicable laws and regulations analyzed DoD and Army policies and procedures drew a statistical sample of payroll transactions to test their accuracy and validity and met with DoD, DFAS-IN, Army, and Defense Manpower Data Center officials. GAO is making four recommendations to help the Army develop the processes and controls necessary to achieve financial statement audit readiness, including identifying and validating the population of military payroll transactions and obtaining and retaining necessary pay-affecting documents. The Army concurred with GAOs four recommendations and noted actions it is taking.
- Administration and Management
- Information Science
- Economics and Cost Analysis
- Military Forces and Organizations