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High Risk Issue


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DOD Financial Management

Problem: DoD??s pervasive financial and related business management and system deficiencies adversely affect its ability to control costs; ensure basic accountability; anticipate future costs and claims on the budget; measure performance; maintain funds control; prevent and detect fraud, waste, and abuse; and address pressing management issues. In addition, DoD??s financial management challenges are a major impediment to an audit opinion on the Federal government-wide financial statements.

Goal: Establish a financial improvement and audit readiness plan with results-oriented performance measures to: (1) correct DoD??s financial management deficiencies to achieve an audit opinion on DoD??s overall financial statements and (2) support the Federal government??s goal of an audit opinion on the government-wide financial statements. Achieve consistent and sustained progress on the path set forth in the plan.


  • Establish and maintain systems and processes sufficient to produce auditable financial statements.

    • Identify and develop a plan with measurable goals for the key improvements in business processes and systems needed to support audit readiness for property, plant, and equipment (including inventory) (PP&E), fund balance with Treasury (FBwT), intergovernmental government transfers (IGT), and environmental liabilities (EL). (By 3/31/09)
    • Develop a strategic plan for PP&E business processes, systems, and accounting that to achieve audit readiness in a cost effective manner. Obtain appropriate buy-in and validate the plan with key stake-holders including DoD top management and components, DoD Office of Inspector General, Office of Management and Budget, Government Accountability Office, and accounting standards setters. (By 3/31/09)
  • Obtain audit opinions on DoD components in support of DoD audit readiness.

    • For FY 2008, maintain clean opinions obtained in FY 2007; obtain first time clean audit opinion for the Army Corps of Engineers; and obtain Office of Inspector General (OIG) audit readiness validations for Air Force General Fund (GF) fund balance with treasury (FBwT) and Navy Ships/Subs EL.
    • For FY 2009, maintain clean opinions as planned from FY 2008; obtain first time clean opinions for Medicare Eligible Health Care Fund (MERHCF), United States Marine Corps (USMC), and Defense Information Systems Agency (DISA); maintain previously obtained audit readiness, and obtain OIG audit readiness validations for Army GF FBwT, Air Force Working Capital (WC) FBwT, and TRICARE Management Activity - Contract Resource Management and Uniformed Services University of the Health Sciences; and issue contracts for audit readiness validations for Navy GF and WC FBwT.
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