The Audit Opinion of the DISA FY 2011 Working Capital Fund Financial Statements Was Not Adequately Supported

Abstract

We determined the adequacy of Acuity Consulting's (Acuity) auditing procedures for the Defense Information Systems Agency (DISA) FY 2011 Working Capital Fund (WCF) Financial Statements. We also determined whether the contract oversight was sufficient. Acuity's auditing procedures on the DISA FY 2011 WCF Financial Statements were inadequate. Specifically, Acuity did not properly test the DISA Fund Balance with Treasury (FBWT) reconciliations; determine whether the undistributed accounts were free of material misstatements; adequately assess whether the deficiencies identified by DISA in its FBWT memorandums for record would have a material impact on the financial statements and Acuity's opinion; perform adequate testing on Property, Plant, and Equipment; and state in its auditor's report that the DISA financial statement disclosures were inadequate. This occurred because Acuity did not perform the audit in accordance with GAGAS, the FAM, and the AICPA standards. In addition, the contract oversight was not sufficient because the Director, Procurement and Logistics Directorate (PLD) prohibited the contracting officer's representative (COR) from completing key duties required to provide oversight of Acuity's work. As a result, Acuity did not have sufficient evidence to issue an unqualified opinion on DISA's FY 2011 WCF Financial Statements. Furthermore, the DoD does not have assurance that the DISA FY 2011 WCF Financial Statements are free of material misstatements. The Director, DISA should review the actions of the Director, PLD; ensure that individuals performing contract oversight of financial statement audits are qualified DISA employees; and seek a refund from Acuity. The Managing Partner, Acuity should withdraw their opinion and review the planned work on future audits to gather sufficient evidence to support their opinion.

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Document Details

Document Type
Technical Report
Publication Date
Apr 26, 2013
Accession Number
ADA580059

Entities

People

  • Richard B. Vasquez

Organizations

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

Tags

Communities of Interest

  • C4I

DTIC Thesaurus Topics

  • Accounting
  • Accuracy
  • Acquisition
  • Contracts
  • Department Of Defense
  • Financial Management
  • Governments
  • Information Systems
  • Language
  • Law
  • Management Information Systems
  • Money
  • Personnel Management
  • Procurement
  • Risk Analysis
  • Standards
  • United States

Fields of Study

  • Business

Readers

  • Defense Financial Management and Audit.
  • Vision Science/Vision Psychology/Cognitive Neuroscience.