We performed the audit to assess the reliability of a nonstatistical sample of data reported in the Army General Fund’s Accounting Report (Monthly) 1002, “Appropriation Status by Fiscal Year Program and Subaccounts Report,” (Appropriation Status Report).
The Army’s Appropriation Status Report was not reliable for data reviewed from the December 2012 report. Material differences existed between reported data from the General Fund Enterprise Business System (GFEBS) and our recalculation of reviewed Budget Line Items. This occurred because the documented processes used by Defense Finance and Accounting Service–Indianapolis (DFAS-IN) to prepare the Appropriation Status Report were insufficient. In addition, Army personnel did not provide documentation to support 28 of 34 financial transactions reviewed. This occurred because the Army did not have an adequate process to readily provide supporting documentation. Additionally, DFAS?IN personnel did not fully support 14 journal vouchers, totaling $83.9 billion. This occurred because the standard operating procedure used by DFAS-IN did not adequately describe the supporting documentation required for journal vouchers. As a result, users of the Appropriation Status Report may not be able to depend upon the data, and the Army’s ability to achieve audit readiness for budget execution data by the end of FY 2014 is at increased risk.
DFAS-IN personnel used the Defense Departmental Reporting System–Budgetary to change GFEBS feeder data associated with $4.2 billion in FY 2013 Army transactions, without appropriate reviews or approvals. This occurred because GFEBS feeder data were not accurate for reporting and automatic adjustments were not properly controlled. As a result, the December 2012 Appropriation Status Report may be misstated, and the Army missed opportunities to improve input and submission processes and reduce costs associated with preparing budget execution reports.
We recommend that the Deputy Assistant Secretary of the Army (Financial Operations) establish a single entry point to support requests for supporting documentation for all accounting transactions, and along with the Director, Army Budget, collaborate with the Director, DFAS-IN, to develop a plan to eliminate these automatic adjustments. We recommend that the Director, DFAS-IN, collaborate with the Defense Departmental Reporting System–Budgetary system proponent to fully document the budget execution reporting audit trail. Further, we recommend the Director revise the standard operating procedure for supporting journal vouchers and require that these automatic adjustments be reviewed and approved in accordance with the governing regulation.
Management Comments and Our Response
Comments from the Army and DFAS-IN addressed all specifics of the recommendations, and no further comments are required.