Army releases Fiscal Year 2023 Annual Financial Report and audit results

By The Office of the Assistant Secretary of the Army for Financial Management and ComptrollerNovember 16, 2023

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WASHINGTON – The U.S. Army today released its Fiscal Year 2023 Annual Financial Report, which includes results from the annual financial statement audit for its general fund and working capital fund. Although the Army’s auditor issued a disclaimer of opinion, the AFR shows that in fiscal 2023 the Army successfully achieved two of its Working Capital Fund Audit Roadmap goals – the downgrade of its fund balance with treasury material weakness to a significant deficiency, and the correct realignment of general ledger findings to the financial reporting material weakness.

These material weaknesses are the first of many the Army is addressing through its Audit Roadmap, including the material weaknesses expected for downgrade in fiscal 2024. The Office of the Assistant Secretary of the Army for Financial Management and Comptroller developed the roadmap to assist in passing the financial statement audit. The Audit Roadmap provides an executable path for successfully reaching a clean audit opinion for its working capital fund and general fund.

“I’d like to thank our Army team for being able to successfully remove two audit material weaknesses for the first time since the Army focused on audit," said Caral E. Spangler, Assistant Secretary of the Army for Financial Management and Comptroller. "Army Materiel Command, the Defense Finance and Accounting Service, and the United States Army Financial Management Command worked closely together for several years to achieve these milestones, and now we can feel confident that the Army’s working capital fund checkbook fully balances with the U.S. Treasury Department.”

Why is this important? The Army pays its bills from the fund balance account. Knowing exactly what funds are available to resource critical pieces of our operations like payroll, acquisitions, and a whole host of other mission-critical activities is a key component of sound fiscal management and will enable further audit success.

Fiscal 2023 marked the sixth annual financial statement audit for the Army’s general fund and working capital fund.

In addition to its success with working capital fund material weaknesses, the Army showed other significant progress in fiscal 2023 toward its goal of auditability. This includes:

·        Implementing an audit acceleration program that facilitates assessments and process reengineering to rapidly reduce Army operations and readiness risks, which is critical to closing auditor findings at a faster rate than before.

·        Achieving the Army’s highest positions ever in the Fiscal 2023 DoD Auditability Rankings for both its general fund and working capital fund, exemplifying the Army’s commitment to audit progress.

·        Closing more auditor findings in fiscal 2023 than in any previous year.

·        Obtaining modified opinions on its accounting system, the General Fund Enterprise Business System, and on its munitions process. The modified opinion on munitions enhances visibility into Army assets, leading to more-informed decision making for warfighters.

The Army is using lessons learned from its fiscal 2023 success to improve Army business operations and eliminate or downgrade material weaknesses moving forward. With each auditor finding that is closed, the Army improves operational capabilities and increases trust with Congress and the American taxpayer. That trust is important as the Army partners with Congress and the Department of Defense to achieve its readiness and modernization goals. The Army financial management community serves the warfighter and their families by resourcing the Army to accomplish its mission and care for its people.

The full version of the congressionally mandated Fiscal Year 2023 Army Annual Financial Report is available here: