Following a directive from former secretary of defense Leon Panetta, the Army must be "audit ready" by 2014 for the General Fund Statement of Budgetary Resources and by 2017 for all other Army financial statements. The Department of Defense is the only Chief Financial Officer Act agency that has not received a favorable independent audit opinion.
"While the department's systems do tell us where we are spending taxpayer funds, we do not yet have the details and controls necessary to pass an audit," Panetta said in an October 2011 statement to the House Armed Services Committee. "This is inexcusable and must change."
Panetta continued to say, "I have directed the department to cut in half the time it will take to achieve audit readiness for the Statement of Budgetary Resources, so that in 2014 we will have the ability to conduct a full budget audit."
In order to prepare for this task, Maj. Gen. Del Turner, commander of the U.S. Army Security Assistance Command, extended an invitation to the Office of the Assistant Secretary of the Army (Financial Management and Comptroller) to meet with USASAC for an information sharing meeting between the two agencies July 8-10. The intent of the session was to decrease learning curves on USASAC processes and Army Audit Readiness requirements, develop working relationships and promote teaming within the Army Audit Readiness community.
"Audit Readiness is the Army's effort to ensure we produce timely, relevant and accurate financial information that supports the highest standard of military readiness in order to pass an audit and obtain an unqualified opinion," Allison Warner, government representative for SBR, said.
"An unqualified opinion proves that we are responsible stewards of taxpayer dollars and accountable for all resources funded through those dollars," added Sherry Masters, chief of internal review and audit compliance at USASAC.
The meeting provided an opportunity for the agencies to partner and develop an understanding of each other's policies, practices and expectations in working toward the 2014 SBR Army Audit Readiness deadline set by Panetta.
Chris Borek, USASAC's resource management team lead for the event, led USASAC subject matter experts in briefing OASA (FM&C) on the policies and processes involved in the Army's Foreign Military Sales program. Information on topics such as administrative and case funds, requisitions and Centralized Information System for International Logistics were presented by the USASAC team. In return, OASA (FM&C) provided guidance and clarification on the audit testing criteria from an Army Headquarters perspective.
Warner said her department is tasked to oversee Army audit readiness and evaluate Army financial processes, controls and transactions while addressing identified failures. For example, often standard Army processes do not fit the USASAC FMS program and must be tailored to address those unique circumstances.
"USASAC operates under tailored FMS processes in addition to the traditional Army procedures," Warner said. "We need to adjust Army audit readiness testing to align with USASAC processes."
Warner said the two-day meeting was valuable to understand how FMS works and be able to work together with USASAC to meet audit requirements. During the visit, the teams walked through testing samples and discussed the criteria applied in reviewing transactions. In depth discussions provided a learning environment with all participants taking away lessons learned.
The partnership developed among the two teams allowed the teams to find potential weaknesses in USASAC's processes and find solutions to correct them and be audit ready by 2014.
"The partnering session was a valuable learning experience and a great investment for both OASA (FM&C) and USASAC," Masters said. "Each attendee's participation contributed to the overall success of the session. Obtaining our goal of 'audit ready' is very close to becoming reality."
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