The Defense Department has spent the last seven years getting itself ready for its first-ever financial audit. But the congressionally-mandated timeline for DoD to become “audit ready” means a new administration will have taken office before the final test.
For the first time, nearly all of the Defense Department’s budget is under professional audit, the Pentagon told Congress in a report last week, making 2015 a “pivotal year” in getting the entire department’s books in audit-ready condition by the end of fiscal 2017.
The Government Accountability Office has concluded that an audit of the Marine Corps’ 2012 financial statements – previously issued by the Defense Department’s inspector general – was riddled with problems, including missteps by the DoD IG itself.
The Defense Department’s inspector general has reversed its findings on the Marine Corps’ 2012 schedule of budgetary activity, saying the clean opinion it first issued is no longer to be relied upon. The 2012 SBA had been the first successful financial audit for any of the military departments.
The Air Force does a 180 and now predicts it will meet the September and the 2017 financial management deadlines. Government auditors and Senate lawmakers agree the key to this effort is whether the Defense Department can upgrade and improve their track record in implementing ERP systems.
The Army hopes to follow behind the Marine Corps in successfully passing a partial audit of its financial statements. While the service acknowledges it’s unlikely to get a clean opinion on the first go-round, it is confident enough in its internal controls to give it a try.
Jamie Morin, the outgoing comptroller and President Barack Obama’s nominee to be DoD’s second director of Cost Assessment and Program Evaluation office, told lawmakers Thursday that the Air Force would struggle to meet the 2014 financial management deadline. Jo Ann Rooney, the nominee to be undersecretary of the Navy, said furloughs from sequestration and the government shutdown have delayed progress on several programs.
New legislation introduced by Sens. Tom Coburn (R-Okla.) and Joe Manchin (D-W.Va.) pushes the Pentagon toward being ready for a full financial audit by restricting spending on major weapons programs if DoD fails to get its books in order.
The Defense Department’s attitude toward the importance of auditability has undergone a marked change, but experts believe compliance with its next legal deadline will be a stretch.
DoD’s top financial manager says the Pentagon is pressing forward to meet Congressional edicts for auditable financial statements. But constant federal budget emergencies are sapping huge amounts of energy from the financial workforce tasked with preparing for audit.