The Department of Defense completed its second department-wide financial statement audit. Seven DoD organizations are expected to receive unmodified or "clean" opinions. Two audits are still underway and are expected to be completed in January 2020, DoD said in a release Nov. 15.
The department reported “this is one more clean opinion than last year for the Defense Commissary Agency. This year, DeCA is expected to progress from a qualified opinion to an unmodified opinion. Auditors also validated that DoD resolved over 550 findings, more than 23 percent, from the department's FY 2018 audit.”
DoD reported the “audit is expanding testing and generating new findings and recommendations. Auditors assessed the completeness and accuracy of financial data, the counts, location and condition of assets, and corrective actions implemented to address prior year findings and recommendations.
Findings help DoD “identify vulnerabilities in cybersecurity, improve inventory management, and provide better data for decision-making.”
The following entities sustained unmodified opinions: “U.S. Army Corps of Civil Engineers - Civil Works; the Military Retirement Fund (MRF); the Defense Health Agency - Contract Resource Management; the Defense Contract Audit Agency; and the Defense Finance and Accounting Service's Working Capital Fund (DFAS WCF). These were the 24th and 19th consecutive unmodified opinions for the MRF and DFAS WCF, respectively,” DoD said.
The Defense Information Systems Agency and DoD Office of Inspector General (IG) audits are still underway. DoD expects the IG will again get a clean opinion.
“The FY 2019 audit demonstrates dedication in pursuing changes necessary to set the Department on an irreversible course in support of the National Defense Strategy,” the release stated.
The DoD reported important progress since last year – auditors increased the depth of their audits by expanding property testing to include asset valuation. During FY 2019, “auditors also confirmed that the department successfully closed more than 550 FY 2018 audit findings. These advances occurred in a broad range of areas including information technology, property, and inventory.”
During the FY 2019 audit, auditors verified the department sustained performance from the FY 2018 audit, including “no significant issues found with payment amounts made to civilian or military members; no evidence of fraud; and existence and completeness of major military equipment.”
DoD said the annual audit is a powerful and effective catalyst driving reform and innovation across department agencies. Reinforcing accountability to taxpayers and directly contributing to enhanced military readiness, the annual audit increases scrutiny and transparency in business operations. The audit enables deeper insights into DoD's complex problems for senior leadership to develop focused, sustainable solutions.
The Defense Department audit report and links to component audit reports will be available at https://comptroller.defense.gov/ODCFO/afr2019.aspx.
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