Independent auditors give Hawaii commissaries unmodified opinion on its FY ‘22 finances

By Kevin Robinson, Defense Commissary AgencyFebruary 9, 2023

MANAGING THE MONEY: Independent auditors give commissary agency unmodified opinion on its FY ‘22 finances
Finances matter for the Defense Commissary Agency (DeCA) as it delivers significant savings to eligible patrons. That’s why it’s significant that the agency’s financial statements for fiscal 2022 received an unmodified opinion from independent auditors. (Photo Credit: Courtesy) VIEW ORIGINAL

FORT LEE, Va. – Finances matter for the Defense Commissary Agency (DeCA) as it delivers significant savings to eligible patrons. That’s why it’s significant that the agency’s financial statements for fiscal 2022 received an unmodified opinion from independent auditors.

The ability of DeCA to manage its financial statements reinforces the Department of Defense’s decision to promote commissaries as part of its Taking Care of Service Members and Families initiative, said Bill Moore, DeCA’s director and CEO.

“When the Department of Defense invested in the commissary benefit as a key component to help boost the Force’s food security, it spoke to the importance of this benefit to the military community,” Moore said. “The ability to manage our finances also demonstrates to the Department, our customers and taxpayers that we are effective and transparent caretakers of this vital benefit, which improves military family quality of life.”

The following is a snapshot of DeCA’s financial highlights for fiscal 2022:

• DeCA achieved 23 percent patron savings, an increase of 0.5 percent from FY 2021

• Commissaries generated more than $4.2 billion in annual sales and $4.4 billion in total revenue

• DeCA generated over $136 million in its private label or Commissary Store Brands sales, a 30.44 percent increase from FY 2021

• DeCA generated $220 million in surcharge revenue

• DeCA received $3 million from cardboard recycling

• The agency also processed 64.5 million transactions in its stores

The agency’s unmodified opinion means a third-party examination found no substantial discrepancies in the agency’s finances. It’s an accomplishment all commissary employees worldwide played a part in, said Cynthia Morgan, the agency’s chief financial officer.

“Our ability to balance our finances reflects on how we deliver the commissary benefit,” Morgan said. “From certifying time and attendance to accounting for products in our store and warehouses to managing sales transactions at the front end, we must be accountable and auditable – that’s the message our leadership emphasizes.”

The independent auditor, CliftonLarsonAllen (CLA), looks at about 500 actions that demonstrate the integrity of DeCA’s internal financial processes and controls and its interactions with external partners, the Defense Finance and Accounting Service (DFAS) and the Defense Logistics Agency.

CLA conducted portions of its audit of DeCA virtually to adhere to COVID-19-related restrictions, said Rosie Leonard-Greer, accounting director in the resource management directorate.

“Financial audits provide an independent assessment of whether the entities’ financial information is presented fairly,” Leonard-Greer said. “The auditors are responsible for obtaining sufficient, appropriate evidence to support their opinion. Key aspects are the entity having mature process and controls, maintaining well-organized and detailed records and complying with accounting standards.

DeCA joined six other defense agencies in receiving an unmodified opinion: U.S. Army Corps of Engineers – Civil Works, the Military Retirement Fund, the Defense Contracting Audit Agency, the Defense Finance and Accounting Service – Working Capital Fund, the National Reconnaissance Office and the Defense Health Agency – Contract Resource Management.

As with all defense agencies, DeCA is included in the DOD Consolidated Financial Statement Audit. This means the commissary agency’s financial wellbeing feeds into the Defense Department’s process, and subsequently DeCA works with DOD to provide requested data to meet the Department’s own audit suspense dates.

The clock starts ticking on DeCA’s official audit when CLA auditors pour over the agency’s financial statements, and all related internal controls and transactions at commissaries and the agency headquarters at Fort Lee, Virginia. The mindset for the agency is that whether the organization is being audited or not, employees need to operate as if every action is under scrutiny, Leonard-Greer said.

“No matter what function an employee performs within the agency there are financial implications, direct or indirect that will ultimately impact DeCA’s budget and ability to accurately reflect our financial posture,” she said. “While, at first glance, it may not seem like it, all DeCA employees play a critical role in maintaining our unmodified opinion. It takes constant vigilance on the part of every DeCA employee to ensure that the duties they perform are timely, accurate and in accordance with all policies and regulations.”

CLA auditors test and evaluate the following key areas:

• Ordering and accounting for resale products

• Processing customer transactions at the stores

• Accounting for property, plant and equipment

• Properly certifying time and attendance

• Compliance with laws and regulations

• Funds balance with treasury, payroll, property, revenue/accounts, receivable/non-exchange revenue, appropriations and budgetary accounts

• The financial reporting and compilation process

• Information technology, especially those areas of the agency’s ongoing deployment of its Enterprise Business System (EBS) that impact inventory and pricing

In the past 22 years, DeCA has achieved an unmodified opinion 21 times through independent auditing. The agency’s unmodified opinion is a testament that all financial matters connected with the delivery of the commissary benefit are accurate, compliant and transparent, said Robert B. Strimple, chief of the agency’s compliance and reporting.

“DeCA’s ability to sustain an unmodified opinion demonstrates the agency’s commitment and passion to serve our military community,” Strimple said. “It is truly an honor and a privilege to carry out DeCA’s mission and to be able to show that we do so under great scrutiny.”

In Hawaii, authorized patrons have four commissaries they can shop at:

  • Hickam
  • Marine Corps Base Hawaii Kaneohe
  • Pearl Harbor (at the NEX)
  • Schofield Barracks

About DeCA: The Defense Commissary Agency operates a worldwide chain of commissaries providing groceries to military personnel, retirees and their families in a safe and secure shopping environment. Commissaries provide a military benefit, saving authorized patrons thousands of dollars annually on their purchases compared to similar products at commercial retailers. The discounted prices include a 5-percent surcharge, which covers the costs of building new commissaries and modernizing existing ones. A core military family support element, and a valued part of military pay and benefits, commissaries contribute to family readiness, enhance the quality of life for America’s military and their families, and help recruit and retain the best and brightest men and women to serve their country.