Saturday, December 14, 2019
Hawai'i Free Press

Current Articles | Archives

Wednesday, November 20, 2019
DoD Annual Financial Report: A lot going on under the Surface
By News Release @ 4:15 PM :: 662 Views :: Ethics, Military

Signs of progress, and new sources of concern, in DoD’s Annual Financial Report

From Truth in Accounting, November 19, 2019

Late Friday afternoon of last week, the Defense Department (DoD) issued its Agency Financial Report. The report arrived on November 15, as expected and as of the same date last year. The DoD received a disclaimer of opinion on its financial statements, as it did last year, and the main service branches (Army, Navy, Air Force, and Marines) continued to get disclaimer opinions. Among the 20+ component entities, the same entities earning unmodified (clean) opinions earned them again this year, while there were no new entities earning clean opinions.

The more things stay the same, on the surface, the more they change. There is a lot going on under the surface. They include signs of progress, as well as new sources of uncertainty, if not future inquiry and/or investigations.

We now have a DoD agency-wide financial report with audited financial statements to compare with an audited report from a year ago -- for the first time ever since the 1990 Chief Financial Officers Act required executive branch departments to issue audited financial statements. Unfortunately, it is too soon to be comparing results from year to year, for a few reasons. For example,

  • In the “Emphasis of Matter” section of the auditor opinion letter to the Secretary of Defense and the DoD Comptroller, the DoD Office of Inspector General (DoD-IG) newly emphasized that it received what it called a “preliminary final” Agency Financial Report, a characterization it did not make last year. This is one sign among others that we don’t yet have apples to compare to apples, as opposed to apples and oranges.
  • The Management Discussion & Analysis section of the report noted that the FY 2019 audits resulted in the issuance of more than 1,300 “Notices of Findings and Recommendations” (NFRs) as of November 15. These can’t be compared to year-ago results, yet, however, because this section also stated that the DoD “anticipates receiving significantly more NFRs as the auditors finish compiling their findings and developing the related NFRs.” 

For the 2018 audit results, Truth in Accounting based our own “Audit Report Card” on a summary report that wasn’t delivered by the DoD Office of Inspector General until January 2019, a couple of months after the DoD Agency Financial Report. It appears we may have to wait for that report again, to develop our rankings and provide an overview of progress and/or deterioration in DoD auditability.

That doesn’t mean there aren’t notable and newsworthy results in what has been delivered to U.S. citizens and taxpayers so far this year. 

  • The number of material weaknesses cited and summarized by the DoD Inspector General declined significantly from last year (20) to this year (14). 
  • DoD apparently made significant progress as 10 identified and named material weaknesses last year were not separately identified in the DoD-IG letter this year. But that letter also identified four newly-named material weaknesses, including a curious “Suspense Accounts” item as well as the “Joint Strike Fighter Program.” (The F-35 fighter jet).
  • The DoD IG letter newly identified a difference of opinion with the DoD on the reporting for “Security Assistance Account” balances administered by the DoD. The DoD-IG believes these balances should be on DoD’s books, and audited as such, while DoD believes they belong elsewhere in the U.S. Government-wide financial statements. 

At the date of the DoD Agency Financial Report, the Federal Accounting Standards Advisory Board had yet to make a decision on this last question, and those balances were not audited or considered by the DoD-IG in developing its audit opinion. The “Security Assistance Account” balances result from foreign arms sales and foreign military training and financing programs worthy of interest, inquiry, and good accounting.

So the DoD may have made progress, for example, in closing about 20 percent of the “Notices of Findings and Recommendations” delivered in last year’s first “full-scope” department audit. But we have much more to learn in the months, and years, ahead.

Truth in Accounting will continue to monitor developments, and we will deliver our own DoD Audit Report Card in the coming weeks. 

DN: Pentagon audit’s secret to success is failure

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

808 State Update AM940

ABCDEFG Blog

ACA Signups Hawaii

ACCE

ALEC

Alliance Defending Freedom

Aloha Life Advocates

Aloha Pregnancy Care Center

American Council of Trustees and Alumni

American Mothers of Hawaii

AMVETS-Hawaii

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Audit The Rail

Ballotpedia Hawaii

Better Hawaii 

Blaisdell Memorial Project

Broken Trust 

Build More Hawaiian Homes Working Group

CAFR Hawaii

Castaway Conservative

Children's Alliance Hawaii

Children's Rights Institute

ChinaTownWatch.com

Christian Homeschoolers of Hawaii

Citizens for Recall

Cliff Slater's Second Opinion

Coffee Break

CSIS Pacific Forum

DAR Hawaii

DeedySupport.com

DVids Hawaii

E Hana Kakou Kelii Akina

E Māua Ola i Moku o Keawe

Farmers For Choice Hawaii

FIRE

Fix Oahu!

Follow the Money Hawaii

Frank in Hawaii

Front Page Magazine

Frontline: The Fixers

Genetic Literacy Project

Get Off Your Butts!

God, Freedom, America

Grassroot Institute

Habele.org

Hawaii Aganst Assisted Suicide

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Coalition Against Legalized Gambling

Hawaii ConCon Info

Hawaii Credit Union Watch

Hawaii Crime Victims' Rights

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defending Marriage

Hawaii Defense Foundation

Hawaii Families for Educational Choice

Hawaii Family Advocates

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Firearm Community

Hawaii Fishermen's Alliance

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii March for Life

Hawaii Meth Project

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Right to Life -- Big Island

Hawaii Right to Life -- Oahu

Hawaii Shield Law Coalition

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

Heritage Foundation

HI Coalition Against Legalized Gambling

HIEC.Coop 

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Homeless Crisis

Honolulu Navy League

Honolulu Traffic

Horns of Jericho Blog

House Minority Blog

House Republican Caucus YouTube

HPACC

Hump Day Report

I Vote Hawaii

If Hawaii News

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

Iowa Meets Maui

Jackson v Abercrombie

Jihad Watch

Judgepedia Hawaii

July 4 in Hawaii

Kahle v New Hope

Kakaako Cares

Kau TEA Party

Kauai Co GOP

Keep Hawaii's Heroes

KeyWiki

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

Mauna Kea Recreational Users Group

MentalIllnessPolicy.org

Middle East Forum--The Legal Project

Mililani Conservatives for Change

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

Muslim Brotherhood in America

NAMI Hawaii

NARTH

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

National Wind Watch

New Zeal

NFIB Hawaii News

No GMO Means No Aloha

Northwest Economic Policy Seminar

Not Dead Yet, Hawaii

Now What I Really Think

NRA-ILA Hawaii

Oahu Alternative Transport

ObamaCare Abortion Hawaii

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Pacific Aviation Museum

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons 

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

Republican Party -- Hawaii State

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

Salvage The Rail

Save the Plastic Bag

School Choice in Hawaii

SenatorFong.com

SIFE Remington

SIFE W. Oahu 

Sink the Jones Act

Smart About Marijuana--Hawaii

St Marianne Cope

State Budget Solutions Hawaii

State Policy Network

Statehood for Guam

Tax Foundation of Hawaii

The Harriet Tubman Agenda

The Long War Journal

The Real Hanabusa

Time Out Honolulu

Truth About Trade & Technology - Hawaii

UCC Truths

Union Members Know Your Rights

US Tax Foundation Hawaii Info

Valor in the Pacific

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT