Report | May 6, 2014

Improvements Needed for Triannual Review Process at Norfolk Ship Support Activity

DODIG-2014-070

Objective

Our objective was to determine the accuracy of unliquidated obligations (ULOs) at the Norfolk Ship Support Activity (NSSA) in Norfolk, Virginia. Specifically we assessed whether ULOs certified during the Triannual Review (TAR) process were accurate.

Finding

Of the 75 ULOs we reviewed and NSSA certified as valid during the January and May 2013 TAR periods we found:

  • 2 valid ULOs, valued at $3.9 million,
  • 16 invalid ULOs, valued at $4.5 million, and
  • 57 ULOs, valued at $24.6 million, of unknown validity.

This occurred because:

  • personnel who validated ULOs did not understand their roles and responsibilities or receive guidance,
  • the NSSA personnel were was unaware of reporting exceptions on the confirmation statements, and
  • quality reviews were not in place to ensure funds holders perform the TAR.

As a result, NSSA can deobligate $5 million,1* and its ULO financial amounts were unsupported. Additionally, the TAR did not provide reasonable assurance that amounts on the Navy Statement of Budgetary Resources were stated correctly and did not demonstrate audit readiness.

1* During the course of the audit, NSSA obtained supporting documents for 17 of the 73 ULOs and deobligated $4.8 million of the $5 million we identified. The remaining $230,000 could have been put to better use if deobligated in a prior period. May 6, 2014

Recommendations

The Assistant Secretary of the Navy (Financial Management and Comptroller), should:

  • develop procedures to address the lack of response and support from stakeholders,
  • provide training for all personnel who perform the TAR, and
  • implement a quality assurance review to evaluate the effectiveness of the TAR process.

The Commander, U.S. Fleet Forces Command, should perform a quality assurance review that validates subordinate activity TAR submissions and notify appropriate chain of command when personnel at subordinate or external activities do not respond to Triannual Review requests.

The Executive Director, NSSA, should:

  • determine whether the ULOs in Appendix B are valid or should be deobligated,
  • develop and implement procedures to gather and maintain supporting documentation,
  • annotate on the confirmation statement how many ULOs were not reviewed, and
  • notify the chain of command when personnel do not respond to TAR requests.

Management Comments and Our Response

Comments from the Assistant Secretary of the Navy (Financial Management and Comptroller) were partially responsive. As a result of comments from the Commander, U.S. Fleet Forces Command, we revised Recommendations 2.a and 2.b. Comments from the Commander, Naval Sea Systems Command, on behalf of the Executive Director, NSSA were responsive.