The Defense Logistics Agency has met a second milestone on the path to be audit ready by 2015. The agency has certified that it has a method for balancing its books, according to a memo signed by DLA Finance Director Tony Poleo Sept. 26.
Poleo explained this is the second assertion letter DLA has sent to the Office of the Secretary of Defense (Comptroller) in support of DLA’s audit readiness efforts.
“It’s part of a larger process that’s not complete yet in this area, which is basically trying to balance our checkbook,” he said after signing the memo.
In a question-and-answer column in the July-August issue of Loglines magazine, Simone Reba also likened the step, known as Fund Balance with Treasury, to balancing DLA’s checkbook. Reba is DLA’s deputy director for finance and manages the agency’s audit readiness efforts.
“Initially we have to prove that we have a process for reconciling the DLA checkbook with the U.S. Treasury checkbook and that we have a process to identify all the documents associated with those balances, analogous to deposit slips and checks,” she wrote.
Audit readiness is a Defense Department effort to prepare agencies for full audits. It is intended to ensure processes and controls within an agency are sufficient for responsible stewardship of funds and other resources. At the direction of Defense Secretary Leon Panetta, the process is to be carried out in four “waves.” They were defined in the Defense Department’s December 2011 Financial Improvement and Audit Readiness guidance as: Appropriations Received, Fund Balance with Treasury, the Mission Critical Asset Existence and Completeness, and the Full-Scope Audit.
DLA met the requirements for Wave 1, Appropriations Received, in June. DoD officials confirmed in August that the step was complete.
Panetta set a fiscal 2017 deadline for the Defense Department to be fully audit ready. DLA Director Navy Vice Adm. Mark Harnitchek made this a top priority for the agency, setting an accelerated goal of 2015 for full audit readiness.
“As we do in all our mission areas, DLA will once again answer the call – in this case to ensure our processes, controls and data are all audit ready,” the admiral wrote in a June blog post.
“It's not just an accounting formality,” he wrote. “The effort taken to upgrade related DLA practices to become fully audit ready will enable us to be better stewards of our funding. It will help us make more informed decisions and stretch our budget.
“It will increase confidence in our financial status and enhance the public's trust that we have good controls to mitigate risk and ensure our data cannot be manipulated,” he continued. ”Ultimately it will allow us to make better decisions on what costs we can eliminate without risking performance of our primary mission to support America’s Warfighters.”