Army Audit Readiness - ASMC

1 army Audit Readiness 7 April 2011 John J. ArgodaleDeputy Assistant Secretary of the army (Financial Operations)2 army AuditReadinessDirectorateOverall Audit Message DoD is committed to meeting Congressional deadline of 2017 for fully auditable statements We have a streamlined and cost-effective approach that focuses on improving information we most use to manage the Department s resources We are seeking cost-effective ways to achieve full auditability We have a long way to go and will need significant Service support23 army AuditReadinessDirectorateWhy Is This Important?

2 Comply with Laws:Laws require financial statement audits Verify Correct Allocation of Funds: Verify that all resources are allocated to approved mission priorities in a legal manner Make Better Use of Resources:Identify dollars before they expire Increase Public Trust: Reassure the public and Congress that DoD is a good steward34 army AuditReadinessDirectorateArmy Audit Readiness Timeline5 army AuditReadinessDirectorateExamination Scope & Expectations Exam 1 2011: Scope: Validate the army s Audit Readiness approach ensure we are doing what an Audit requires Continue to educate army personnel on Audit requirements Processes include: Funds Receipt and distribution below ABO level (Command HQ to installation); TDY-DTS travel; PCS travel; Contracts-SPS; Reimbursable-Inbound/Outbound Expectations: Validation of Audit Readiness strategy and work Limited testing success Exam 2 2012: Scope: Expanded to include Civilian Pay; Misc.

3 Payments; Supply Requisitions; Non-SPS Contracts; DFAS Financial Reporting; this brings us up to all SBR processes at wave 1 and wave 2 sites Dependent upon Exam 1 results, as well as discovery and evaluation at GFEBS wave 2 sites Initial systems Audit of GFEBS application security (access controls), business process controls (automated and manual), data integrity controls, and information technology general controls; GFEBS system Audit scope dependent upon results from current GRC work to be complete by 12/31/11 Expectations: Improved & effective internal control environment Successful Audit of several processes/assessable units, likely Funds Receipt, Distribution, & Monitoring; TDY-DTS; Civilian Pay Clean opinion on GFEBS access controls6 army AuditReadinessDirectorateExamination Scope & Expectations (cont.)

4 Exam 3 2013: Scope: Full Audit of all SBR business processes at all GFEBS locations Expectations: Sustain successes from Exam 2 and expand to include remaining material business processes (if any) Expand successful Audit results to additional business processes (Misc. Payments; Contracts-SPS; etc.) Successful FISCAM Audit of GFEBS, including interfaces, but excluding feeder systems Identification of final gaps to address prior to assertion in 2015 Exam 4 2014: Scope: Full Audit of all SBR business processes at all GFEBS locations Expectations: Sustain successes from Exam 2 and expand to include remaining material business processes (if any) Expand successful Audit results to additional business processes (Misc.)

5 Payments; Contracts-SPS; etc.) Successful FISCAM Audit of GFEBS, including interfaces, but excluding feeder systems Identification of final gaps to address prior to assertion in 2015 Complete, successful Audit of all SBR processes within GFEBS environment at all GFEBS locations Ability to assert Audit ready for GF SBR7 army AuditReadinessDirectorateControls SummaryControl NumberDefinitionFunds Receipt and Budget Analyst runs an SoFreport daily to monitor for new allotments and execution of the funds within each sub-activity group (SAG). The SoFreport indicates whether, at the SAG level, the Command has over or under executed funds in comparison to the budget and spend plan.

6 The analystreviews the execution issues and researches the amounts being executed by the divisions. This review is evidenced by an e-mail to the Supervisor or by signing off on the Branch Analyst updates the monthly assessment report on a monthly basis which details the execution for all funds (includes detail on actual Base Operating Support Services (BOSS) execution, Overseas Contingency Operations (OCO) execution). It also details the year to date executions forcommitments and obligations by program directorate and the remaining requirements and expected shortfalls through year-end.

7 The report is manually completed by the analyst with data that is pulled from GFEBS and evidenced by the Budget Analyst within the Purchase Requester s organization verifies the Purchase Request (PR) against the Spend Plan andperforms Level 1 approval in Supervisory Budget Analyst reviews the approved Purchase Request (PR) and certifies funds availability (Level 4 approval) in Directorate of Contracting (DOC Contract Specialist) reviews the Purchase Request (PR) data in SPS/PD2 and creates the contract based on information listed on the Contract Officer reviews the approved Purchase Request (PR) within SPS/PD2 through GFEBS interface to the created contract.

8 The Contract Officer signs and awards the Budget Analyst (or designated individual) reviews the vendor submitted approved invoices and receiving reports in order to determine if the invoice data (quantity, unit price, total amount, service rates, etc.) are in accordance with the contract terms. Also, the Budget Analyst (or designated individual) verifies the billed amounts match what has been received by the Requestor and (RM as Performer): The analyst with the appropriate user role reviews the MIPR to verify all required fields including quantity, price, signatures, WBS Element and LoA are completed by referring to the information provided by the Performer via ISSA, MOA, MOU or e-mail regarding the Reimbursable (RM as Performer).

9 The RM office analyst with the appropriate GFEBS user roles refers to the MIPR (DD Form 448) to create the Sales Order to verify all required fields are completed and that the Sales Order matches the components detailed in the (RM as Requestor): Once the budget analyst generates the MIPR and creates the PR in GFEBS, a secondary budget analyst must do the Level 1 (L1) Release on the PR within GFEBS. The L1 Release is the initial approval of the (RM as Requestor): Once the secondary budget analyst does the L1 Release, another analyst with the appropriate user rights must do the Level 4 (L4) Release on the PR within GFEBS.

10 The L4 Release commits the funds within GFEBS. The Funds Commitment Document in a specific PR will reference when funds are committed in the AuditReadinessDirectorateControls SummaryControl NumberDefinitionTemporary Duty (TDY) system is configured to ensure roles and responsibilities are segregated by the following functions: Receiving Funds (Traveler) Approver (Approving Official) Processing and Recording: (Traveler or Defense Travel Administrator (DTA) with Approving Official's (AO) electronic approval) orders are reviewed and quality checked by the Defense Travel Administrator (DTA)/ Approving Official (AO) and the Directorate Reviewers to verify that the correct line of accounting (LoA) is used and that travel orders meet regulations and approval Approving Official (AO) approves/certifies the voucher in Defense Travel System (DTS) by applying a digital stamp.