Case in Point: Defense Commissary Agency Maintains its Unqualified Opinion on Financial Statements

For FY06, the Defense Commissary Agency (DeCA) received the highest score in DoD for its Statement of Assurance on the effectiveness and efficiency of operations, the reliability of its financial reporting, and its compliance with applicable laws and regulations. In addition, DeCA was recognized as a leader in the implementation of OMB Circular A-123, Appendix A and their aggressive approach to testing and strengthening internal controls over financial reporting has been cited by DoD as a model for the Department. The A-123, Appendix A process imposes strict requirements on the internal controls an agency uses to achieve, and sustain, a clean audit opinion by requiring a systematic review of its financial processes each year. The bar is higher for agencies, like DeCA, who have received an unqualified opinion. For these agencies, every process that is material to its financial position has to be reviewed as opposed to agencies with no opinions which focus on those processes having material weaknesses. In FY06, DeCA reviewed 19 financial processes that it deemed to be material. These exhaustive reviews help agencies with clean opinions to identify and address any weakness that could jeopardize the receipt of unqualified opinions in the future.

DeCA received an unqualified opinion on its FY06 Audited Financial Statements from the independent accounting firm of KPMG, LLP for the fifth year in a row. This made DeCA one of a select group of DoD agencies who have earned this distinction. DeCA was one of only six organizations or funds that received an unqualified opinion on FY06 financial statements and one of only four to receive unqualified opinions for the fifth year in a row. The audits concluded that the financial statements are presented fairly, in all material respects, in conformity with accounting principles generally accepted in the United States of America, and disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards, issued by the Comptroller General of the United States, and OMB Bulletin Number 01-02.