WASHINGTON — The Army continues to make deliberate, measurable progress in strengthening financial stewardship, improving auditability, and modernizing its financial environment, demonstrating forward momentum even as it once again received a disclaimer of opinion in its most recent audit.
This year’s audit reflects both the scale and complexity of the Army’s global mission and the tangible gains being achieved across people, processes, and technology. While longstanding structural challenges remain, the Army reduced risk, strengthened controls and advanced reforms that directly support operational readiness and taxpayer trust.
“The Army remains fully committed to strengthening financial stewardship, improving auditability, and ensuring every dollar entrusted to us directly advances operational readiness,” said Principal Deputy Assistant Secretary of the Army for Financial Management and Comptroller Candice Kinn. “This year’s audit reflects both the scale of our mission and the progress we are making across people, processes, and technology.”
Measured Progress in a Complex Enterprise
During this audit cycle, the Army downgraded three material weaknesses and five significant deficiencies, reflecting meaningful improvements in its financial control environment. These advancements were driven by disciplined remediation efforts, stronger governance and sustained leadership engagement across the enterprise.
Audit findings remain concentrated in well-known high-risk areas: beginning balances, inventory and operating materials and supplies and property accountability. These issues are not new, nor are they simple to resolve. They stem from decades of legacy systems, incomplete historical documentation and fragmented data environments that were never designed to meet modern audit standards.
While the Army continues to receive a disclaimer of opinion, the trajectory is forward. The Army refined financial reporting and journal entry processes, completed major corrective actions and developed integrated project plans with defined actions and schedules to address remaining material weaknesses.
A Risk-Based Strategy Focused on Impact
Rather than pursuing short-term fixes, the Army is prioritizing high-risk areas through a disciplined, risk-based remediation strategy. Resources are being surged toward the highest-impact issues, and data analytics are being increasingly leveraged to focus efforts where they matter most.
Audit insights are now directly informing system modernization decisions, governance reforms, and resource prioritization, connecting financial accountability to readiness outcomes. These reforms strengthen how the Army tracks inventory, manages property portfolios and produces reliable financial data that leaders depend on to make informed decisions.
“Audit is not a checkbox for us. It is a readiness enabler,” Kinn emphasized. “We know where our challenges are, we have a roadmap to address them, and we are accelerating reforms across the force.”
Modernization as the Path Forward
Many of the Army’s remaining audit challenges cannot be resolved through process changes alone. Legacy financial, logistics, and property systems — some decades old — were not built for integrated data sharing or modern audit requirements. As a result, system modernization remains foundational to achieving sustainable auditability.
The Army is strengthening data governance, improving system interfaces and expanding automation and analytics to improve data reliability across the enterprise. These efforts are essential not only for audit purposes, but for improving efficiency, transparency and long-term stewardship of resources.
Achieving a clean audit opinion is a long-term objective dependent on reliable beginning balances, modernized systems and sustained execution of effective internal controls. The Army’s integrated project plans are aligned with the Department’s goal of meeting the 2028 deadline, balancing urgency with durability to ensure progress is real and lasting.
Readiness Remains Unaffected
Audit findings do not impede the Army’s ability to execute its mission. Soldiers continue to be paid, units remain equipped, and operations continue worldwide. Audit remediation efforts enhance readiness by improving data accuracy, strengthening accountability and enabling better-informed resource decisions.
By identifying weaknesses in inventory management, property accountability and financial processes, the audit helps the Army improve how it tracks, sustains and allocates resources critical to operational effectiveness.
Building Trust Through Transparency
A disclaimer of opinion does not indicate fraud, waste or misuse of funds. It reflects limitations in documentation, legacy systems and internal controls within an enterprise of extraordinary size and complexity. The Army has been transparent about these challenges and continues to use the audit process as a tool for accountability and reform.
Each year, the audit provides clearer insight into risk areas, strengthens governance and drives modernization decisions that improve stewardship over time. While the work ahead remains significant, the Army’s progress this audit cycle demonstrates sustained momentum toward stronger financial management.
“The Army will continue to strengthen stewardship, modernize financial systems, and ensure transparency and accountability at every echelon,” Kinn said. “This is about building durable capabilities that support readiness today and trust tomorrow.
The full report is available at: https://www.asafm.army.mil/portals/72/Documents/Audit/fy25afr.pdf
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