The U.S. Army made trillions of dollars of adjustments to its financial data for fiscal year 2015 that are not adequately documented and supported, according to a recent report by the Defense Department’s Inspector General.
According to the July audit, the Office of the Assistant Secretary of the Army (OASA) and the Defense Finance and Accounting Service (DFAS) Indianapolis did not adequately support $2.8 trillion in third quarter journal voucher adjustments and $6.5 trillion in year-end JV adjustments made to Army general fund (AGF) data.
The unsupported adjustments, made during FY 2015 financial statement compilation, “occurred because OASA(FM&C) and DFAS Indianapolis did not prioritize correcting the system deficiencies that caused errors resulting in JV adjustments, and did not provide sufficient guidance for supporting system‑generated adjustments,” the report said. The DFAS also did not document why the defense department’s budgetary reporting system removed at least 16,513 of 1.3 million records during third quarter FY 2015. The DFAS lacked both detailed documentation on the system’s import process and complete systems reports, according to the report.
The Inspector General thus found the Army general fund financial statements for 2015 third quarter and year-end to be unreliable without an adequate audit trail. This could compromise the Army’s ability to achieve audit readiness by the Sept. 30, 2017 deadline mandated by Congress.
"Though there is a high number of adjustments, we believe the financial statement information is more accurate than implied in this report," said Dov Schwartz, an Army spokesman, in a written statement reported by CNN.
The Inspector General recommended OASA(FM&C) periodically review system-generated adjustments and should, along with DFAS Indianapolis, provide the resources to review system change requests and, as necessary, develop other corrective actions for the system deficiencies causing these errors.
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