Jokes about getting audited are stock-in-trade for comedians. It’s usually no laughing matter, but the U.S. Army Corps of Engineers had its fiscal 2008 civil works finances audited, and got a clean bill of financial health.

The technical term is an "unqualified opinion," meaning that USACE passed the audit with no qualifiers – no ifs, ands, or buts.

"This score verifies that we’re an organization of people with honesty and integrity. We do what we say, and say what we do," said Lt. Gen. Robert Van Antwerp, chief of engineers. "I’m proud to also announce that we’ve set a new benchmark in the federal community. We’re the largest federal agency in terms of property, and the first major DoD activity to receive this unqualified opinion."

This audit opinion was a long time coming – about 15 years.

According to Michael Walsh, chief of Finance and Accounting in Headquarters, the Chief Financial Officers Act of 1990 requires audits of all DoD financial statements. The Corps’ civil works financial statements were audited for the first time in 1993. (Military programs’ finances are audited separately as part of the Army’s General Fund.)

"From 1993 through 2001 the Army Audit Agency audited our financial statements," Walsh said. "We always got disclaimers, meaning they were unable to come to an opinion concerning our financial statements. In the early years, before the Corps of Engineers Financial Management System (CEFMS), we didn’t have a compliant accounting system. We also had major issues about the proper support for our Property, Plant, and Equipment (PPE)."

In 2001, based on a new independent standard, the Department of Defense Inspector General (DoDIG) took over the Corps’ civil works financial statement audits.

"We worked with DoDIG from 2001 to 2005 to get ready for audit," Walsh said. "At the end of ’05 we felt we were in pretty good shape to pass a financial statement audit."

Under the new independent standard, DoDIG contracted for an independent private accounting (IPA) firm to perform the audit. The auditor that DoDIG contracted for USACE was PriceWaterhouseCooper (PWC), one of the biggest accounting firms in the U.S.

"2006 was our first audit from an IPA," Walsh said. "There were issues with our PPE regarding valuation for older pre-CEFMS assets that prolonged the 2006 opinion into the 2007 audit cycle. Resolving this long-standing issue regarding valuation took a huge effort from the USACE field activities.

"On March 31, 2007 we got a qualified opinion, which is basically a B grade," Walsh said. "They said our financial statements are in good shape except for PPE. Still, that was a pretty huge accomplishment in itself."

This latest audit began last April. PWC audited the five principal financial statements -- balance sheet, statement of changes in net position, statement of net costs, statement of financing, and statement of budgetary resource (a roll-up of all of the Corps’ civil works accounting transactions).

On Nov. 17, USACE finally got an unqualified audit opinion on its fiscal 2008 civil works financial statements from DoDIG. "That means the financial statements are a fair presentation, period," said Wesley Miller, director of Resource Management. "There were no qualifications. It’s the A-plus of auditing, and USACE is the first major activity in DoD to get such an opinion."

Such an audit means more than a lot of happy USACE accountants.

"It gives evidence to Congress and the taxpayers that we are good stewards of the funds entrusted to USACE," Miller said. "This particular audit has been under the purview of the Office of Management & Budget via the President’s Management Agenda Scorecard. This will definitely give us an upgrade on that scorecard."

This perfect auditing score did not come without a lot of hard work.

"Early-on we anticipated audit completion in December, but we worked on an accelerated time-line with the auditors and completed the audit a month earlier than anyone expected," Walsh said.

"The USACE Finance Center in Millington, Tenn., was exceptional in supporting the year-end financial statement preparation," Miller said. "They actually had to do it twice, once to meet the timelines set by the Office of the Secretary of Defense, plus an offline preparation to include all the auditor adjustments. Having our own Finance Center and financial system were keys to success."

Miller also applauded the tremendous effort that the field activities displayed in responding to more than 2,000 individual sample items during October.

This unqualified opinion from DoDIG and PriceWaterhouseCooper is cause for celebration, but not for complacency.

"We’ll start the fiscal 2009 audit in a few months," Walsh said. "Our financial statements were fairly represented this year, but there are certain control items where we can improve. We will develop corrective actions for any of our weakness areas. We’ll work on them throughout most of 2009, and continue to improve. This is about our financial statements, but a lot of the underlying benefit is in improving internal controls throughout USACE."