The Department of Defense (DoD) has completed its fourth consecutive department-wide financial statement audit. “These audits are a driving force in achieving the transformation goals of the Department,” said Under Secretary of Defense (Comptroller) and Chief Financial Officer Michael McCord. “Audit results catalyze change by highlighting areas that need improvement and providing managers with the information they need to prioritize modernization efforts and make meaningful long-term change. “
Eight DoD Reporting Entities Should Keep Their Opinions Unaltered. This was the 27th consecutive unmodified opinion for the Military Retirement Fund, which represents more than 30 percent of the department’s total assets; 22 for the Working Capital Fund of the Defense Finance and Accounting Service; the 14 for the US Army Corps of Engineers – Civil Works; and the 12th for the Defense Health Agency – Management of contractual resources. The Medicare-Eligible Retiree Health Care Fund again received a qualified opinion. Almost 47% of the Ministry’s assets should receive a favorable opinion.
Audits continued to mature and were extended in FY (FY) 2021. They required over 1,200 auditors, 278 in-person site visits, and 1,069 virtual site visits to review business processes and activities. of the DoD. Auditors requested approximately 34,000 documents and tested approximately 55,000 samples. While virtual site visits have delivered efficiencies, a full year of COVID-19 protocols has exacerbated the challenges by restricting listeners’ access to certain sites and data, particularly in areas requiring service. in person access.
The ministry succeeded in downgrading the material weakness of the DoD-wide Military Housing Privatization Initiative. However, the Department received a new significant weakness (compilation of financial statements) and saw the return of two significant weaknesses (contingent legal liability and reconciliation of net cost of operations to expenditure, both of which had been downgraded last year). for a total of 28 hardware weaknesses. Services downgraded four significant weaknesses. The general fund of the Air Force has lowered the rating of possible legal responsibilities and oversight and oversight of internal control. The Air Force working capital and the general navy fund each lowered one major weakness (general goods, facilities and equipment, and utilities, respectively).
The auditors also performed 27 reviews of the Engagement Attestation Standards Statement 18 covering 44 systems owned by eight service providers. The number of unmodified notices increased by three in fiscal 2021 to 15 unmodified notices. There were seven qualified opinions and five unfavorable opinions. The Department exceeded its target of 75% of the annual performance plan with 81% favorable opinions (22 of 27 opinions).
The Defense Commissary Agency and the Defense Contract Audit Agency also obtained unmodified audit opinions during fiscal year 2021. The audits of the DoD Office of Inspector and the Defense Information Systems Agency – Working Capital Fund are still ongoing. , but these reporting entities should maintain their unmodified status. audit opinion.
“I am proud of all that the Monitor’s organization continues to accomplish,” continued Mr. McCord. “While we have stayed true to our audit priorities, the Comptroller organization also played a major role in supporting other high-visibility, ministry-wide objectives for fiscal 2021, including the transition administrations, the support of our troops and the nation in response to the COVID-19 pandemic, and the withdrawal of our troops and Afghan allies from Afghanistan. I have no doubt that with the continued dedication of women and men across the Department of Defense, and the support of our other stakeholders — Congress, the Federal community, and the American people — we will achieve our objective of obtaining an unmodified audit opinion. “