With six “shows” behind her and two more to go, Defense Logistics Agency Deputy Director of Finance Simone Reba hosted an audit readiness roadshow Oct. 3 for McNamara Headquarters Complex employees.
Reba, the agency’s program manager for audit readiness, has been traveling throughout the agency, spreading the word to senior leaders and employees about the agency’s audit readiness achievements and goals. Audit readiness, part of the Defense Department’s efforts to prepare agencies for audits, ensures processes and controls within an agency are sufficient for responsible stewardship of funds and other resources.
Part of the process of audit readiness is to understand the controls already in place to mitigate risk to the agency, Reba said.
“The things we’re mostly worried about with audit readiness are the things that affect financial controls,” Reba said. “Financial controls that an auditor would end up looking at, like payroll, result in big financial dollars. The risk is that people would be paid incorrectly. Controls that we have in place are supervisors certifying and signing your leave slip, reconciliation, system controls, and data analysis.”
Although DLA’s budget is stretched, audit readiness can help find efficiencies, Reba said.
“We’re making decisions in a system that does not reflect what the actual financial health of our business,” Reba said. “As we look and see what we’re doing, we’ll actually be able to figure out how we can be more efficient. If we can be a little bit more standardized and streamlined in our processes, we can still give the support to the warfighter that they need while having good processes with integrity and making our budget go a little further. That’s one thing audit readiness can help us with.”
The upcoming financial audits ensure that DLA officials are checking their work when it comes to taxpayer dollars, akin to being in a math class in school, Reba said.
“Most audits are performance audits and are usually there to check for fraud, waste and abuse and to look at efficiency and effectiveness,” Reba said. “In a financial statement audit, it’s different. All they really care about is, ‘Can I prove the numbers?’ So in grade school, your algebra teacher may have made you show the math; that’s what they’re doing here. They want you to take the ending balances that are reflected in our financial statements and be able to take all the things that happened between the time it was posted and the time it started and prove that number is correct.”
In a Sept. 28 Audit Readiness Team meeting, Reba emphasized two key points for a successful audit readiness program.
“If you haven’t figured it out by now, there’s nothing more important to audit readiness than controls and data,” she said. “Controls ensure that we have good data basically. It goes hand-in-hand.”
In order to meet upcoming audit readiness goals, Reba stressed the importance of DLA being both on time and on schedule in meeting assertion deadlines. The assertion timeline, when an agency deems itself audit-ready toward a particular goal, is an important component to proper audit readiness, as is keeping data current, Reba explained.
“If you leave this meeting with anything, please understand our assertion timelines aren’t going to change,” Reba said. “Bottom line, there is a hard stop. As we develop and execute our plans, if we realize we’re getting behind in a certain area, that is going to require us to get back on track. The idea of slipping is not a favorable decision in this environment, so we need to stay on our timeline. We have to prove that we can continue to produce good data. Once we assert, auditors will be with us every year.”
With the first and second wave assertions, Appropriations Received and the Fund Balance with Treasury, already successfully passed, the remaining two waves, Mission Critical Asset Existence and Completeness and the Full-Scope Audit, are due for completion within the next two years.
Audit readiness, a top priority for the agency as part of DLA Director Navy Vice Adm. Mark Harnitchek’s “Big Ideas,” has been pushed to the forefront as the agency’s goal of audit readiness by fiscal 2015 quickly approaches.
The roadshows are meant to be the first line of communication to DLA employees, Audit Readiness Team members explained. They have already been held with senior managers and employees in Michigan, Pennsylvania and Virginia. The final roadshow events are Oct. 5 at DLA Land and Maritime and the Defense Finance and Accounting Services’ Civilian Transaction Service in Columbus, Ohio.