Objective
We determined whether the Air Force’s controls over recording accounting transactions within the Defense Enterprise Accounting and Management System (DEAMS) Order-to-Cash (O2C) business process were adequate.
Finding
Air Force managers did not implement adequate controls over recording financial transactions within the DEAMS O2C business process. Specifically, Air Force managers did not include controls for reconciling general and subsidiary ledgers or to make corrections to the categories of Transportation Working Capital Fund (TWCF) transactions that were incorrectly created by other locations that process accounting transactions.
This occurred because Air Force managers conducted inadequate business process reengineering and did not conduct comprehensive risk assessments to identify certain financial reporting requirements.
As a result, in FY 2012, 11 accounts associated with the DEAMS O2C business process produced about $2.8 billion of abnormal balances while processing data for only one location. However in FY 2013, Air Force managers implemented improvements that resulted in a reduction of abnormal balances in the 11 accounts to about $154 million. In addition to the FY 2013 abnormal balances, the lack of reconciling controls and controls to make corrections to incorrectly categorized TWCF transactions resulted in data errors of about $25 million. As DEAMS deploys to additional locations, data inaccuracies could grow significantly if not corrected and would likely hinder the Air Force from using DEAMS to meet its FY 2017 auditability requirement.
Recommendations
We recommend that the Assistant Secretary of the Air Force (Financial Management and Comptroller) establish and maintain evidence of metrics for measuring abnormal balances. Furthermore, we recommend he conduct and maintain evidence of a comprehensive site assessment to include risk assessments and business process reengineering. We also recommend that the Director, DEAMS Functional Management Office, conduct and maintain evidence of monthly monitoring of the metrics measuring abnormal balances at all deployed sites of DEAMS, and report the outcome to senior level Air Force managers.
Management Comments
The Deputy Assistant Secretary of the Air Force (Financial Management and Comptroller) provided comments that were responsive and agreed with the recommendations for the Assistant Secretary of the Air Force (Financial Management and Comptroller) and the Functional Manager, DEAMS Functional Management Office. Therefore, no additional comments are required.