Defense Finance and Accounting Service Needs to Improve the Process for Reconciling the Other Defense Organizations' Fund Balance with Treasury

Abstract

We evaluated the adequacy of audit trails and assessed the Other Defense Organizations' (ODO) Fund Balance with Treasury (FBWT) reconciliation processes. This is one in a series of reports relating to the reconciliation of the ODO FBWT accounts. The first report concluded that the Cash Management Report (CMR) was not complete or accurate. We found that the Defense Finance and Accounting Service (DFAS) Indianapolis did not perform adequate, transaction-level reconciliations of the ODO FBWT general ledger accounts. Specifically, DFAS Indianapolis did not develop processes for the following: retrieving the detailed transactions supporting the CMR in a timely manner; matching the transactions supporting the CMR to the detailed transactions recorded in the accounting systems; and researching, and if necessary, resolving the variances between the two sets of data. This occurred because DFAS Indianapolis did not develop the systems infrastructure, implement systemic processes, or fully dedicate the necessary resources for performing transaction-level reconciliations of the ODO FBWT accounts. DFAS Indianapolis reported that it was responsible for reconciling 723 ODO appropriations with disbursements and collections, totaling approximately $141 billion. Without adequate FBWT reconciliations, DFAS Indianapolis could not support the adjustments it was making to the ODO FBWT accounts, which caused amounts reported on the ODO financial statements to be unreliable. Unreliable financial statements will impede DoD's ability to achieve audit readiness for the Statements of Budgetary Resources by the end of 2014. Unlike DFAS Indianapolis, DFAS Columbus was performing complete, transaction-level reconciliations. In addition, other than allowing $16.1 million in Defense Information Systems Agency disbursements and collections to remain unmatched for more than 4 years, DFAS Columbus provided evidence that it had adequate procedures for researching and resolving variances.

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Document Details

Document Type
Technical Report
Publication Date
Jul 09, 2012
Accession Number
ADA562352

Entities

People

  • Amy J. Frontz

Organizations

  • United States Department of Defense

Tags

Communities of Interest

  • Human Systems
  • Space

DTIC Thesaurus Topics

  • Accounting
  • Accuracy
  • Agreements
  • Auditing
  • Business Administration
  • Commerce
  • Data Sets
  • Deficiencies
  • Department Of Defense
  • Department Of State
  • Finance
  • Financial Management
  • Information Systems
  • Infrastructure
  • Payment
  • Standards
  • Storage

Readers

  • Defense Financial Management and Audit.