Defense Finance and Accounting Service Needs to Improve Controls Over the Completeness and Accuracy of the Cash Management Report

Abstract

We assessed the completeness and accuracy of the Cash Management Report. This is the first of two reports relating to the reconciliation of Fund Balance with Treasury for the Other Defense Organizations (ODOs). As of September 30, 2009, DoD reported $80.3 billion in Fund Balance with Treasury on the ODO General Fund Balance Sheet. The DoD IG found that the Cash Management Report was not complete or accurate. Specifically, the Director, Defense Finance and Accounting Service (DFAS) Indianapolis did not attribute approximately $10.5 billion in transactions to the ODO responsible for reconciling and accounting for the transactions. This occurred for the following reasons: DFAS Indianapolis did not properly research and resolve variances on a regular and recurring basis, ODO submitters did not always report transactions to DFAS Indianapolis with valid lines of accounting, and DFAS Indianapolis did not establish a process for communicating with the ODO submitters. As a result, the ODOs reconciled their Fund Balance with Treasury general ledger accounts to the Cash Management Report, which in aggregate did not match the amounts reported by the U.S. Treasury. Because the ODOs must rely on the amounts on the Cash Management Report as a control total for reconciling to the U.S. Treasury, these unreconciled variances seriously undermine the reliability of the Cash Management Report as a reconciliation tool and impede the auditability of the ODO Fund Balance with Treasury accounts. This has a significant negative effect on an ODO's ability to obtain a favorable financial statement audit opinion unless adequate compensating controls are implemented. DFAS Indianapolis addressed some of the deficiencies identified during this audit.

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Document Details

Document Type
Technical Report
Publication Date
Aug 15, 2011
Accession Number
ADA548889

Entities

People

  • Amy J. Frontz

Organizations

  • Office of the Inspector General, U.S. Department of Defense

Tags

Communities of Interest

  • Human Systems
  • Space

DTIC Thesaurus Topics

  • Accounting
  • Accuracy
  • Availability
  • Business Administration
  • Comptrollers
  • Conversion
  • Deficiencies
  • Department Of Defense
  • Disbursements
  • Errors
  • Finance
  • Financial Management
  • Governments
  • Law
  • National Security
  • Payment
  • Reliability

Readers

  • Defense Financial Management and Audit.